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Germany Faces Budget Crisis Amid Debt Brake Controversy

Germany’s constitutional debt brake, enacted in 2009 by then-Chancellor Angela Merkel, is under scrutiny following a ruling that deemed the 2021 supplementary budget unconstitutional. This ruling has triggered a budgetary crisis as the country heads into 2024 without an approved budget. The coalition government of the Social Democratic Party (SPD), the Greens, and the Free Democratic Party (FDP) struggles to reconcile the need for further borrowing against the backdrop of rising costs due to the Ukraine war. Calls for reform or repeal of the debt brake intensify amidst growing concerns about infrastructure investment needs and economic stability.

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