Prof Dr Christoph Grpl Lehrstuhl fr Staats und

Prof. Dr. Christoph Gröpl Lehrstuhl für Staats- und Verwaltungsrecht The new German ‘Debt Brake‘ —a constitutional attempt to restrain state indebtedness

’Debt Brake‘ Israel public debt: € 54 bn (≈ $ 78 bn) population: 7. 6 m ≈ € 7, 000 per capita Germany public debt: € 2, 000 bn (≈ $ 2, 908 bn) population: 82 m ≈ € 24, 000 per capita Prof. Dr. Christoph Gröpl · Debt Brake 2

’Debt Brake‘ Hierarchy of Norms (national level) Constitution Parliamentary Acts other acts of State Prof. Dr. Christoph Gröpl · Debt Brake 3

’Debt Brake‘ Art. 115 par. 1 Basic Law (version 1969) […] Revenue obtained by borrowing shall not exceed the total of investment expenditures provided for in the budget… … exceptions shall be permissible to avert a disturbance of the overall economic equilibrium. FCC: wide range of discretion for the budgetary legislator Prof. Dr. Christoph Gröpl · Debt Brake 4

’Debt Brake‘ Art. 126 par. 1 TFEU (Lisbon version 2009) § § annual deficit limited to 3% GDP overall debt restrained to 60% GDP Problem: lack of enforcement Prof. Dr. Christoph Gröpl · Debt Brake 5

’Debt Brake‘ Art. 109 par. 3 Basic Law (version 2009) The budgets of the Bund and the Länder shall in principle be balanced without revenues from credits. (applicability: 2016 [Bund], 2020 [Länder]) Exceptions: § deficits in times of downswing to balance the effects of market developments that deviate from normal conditions § unusual emergency situations beyond governmental control and substantially harmful to the state’s financial capacity Prof. Dr. Christoph Gröpl · Debt Brake 6

Thank you for your attention! Prof. Dr. Christoph Gröpl · Debt Brake 7