By Maria Martinez BERLIN (Reuters) -German debt is expected to increase to 80.25% of gross domestic product by 2029 from 62.5% last year due to a rise in defence and infrastructure spending, according
Germany's debt to rise above 80% by 2029, stability council
Germany's Debt Outlook and Economic Implications
By Maria Martinez
Impact of Increased Defense Spending
BERLIN (Reuters) -German debt is expected to increase to 80.25% of gross domestic product by 2029 from 62.5% last year due to a rise in defence and infrastructure spending, according to the country's stability council, which coordinates federal and state finances.
EU Fiscal Rules and National Exemptions
European Union fiscal rules limit government deficits to 3% of GDP and debt to 60% of GDP.
Future Generations and Economic Stability
By 2026, the government deficit could rise to as much as 4.75% of GDP, before falling again to 3.75% of GDP in 2029, the stability council said after its meeting on Tuesday.
Germany requested a "national escape clause", or exemption, from EU deficit rules allowing member states to raise defence spending without any disciplinary steps that would normally kick in once a deficit exceeds 3% of GDP.
Nevertheless, the stability council warned that exceeding this limit could have negative effects in the coming years.
"Precisely in the interest of future generations, we must invest in future viability, economic strength, and security while at the same time ensuring sound public finances," Finance Minister Lars Klingbeil said in a statement. He called for a consolidation of the federal and state budgets.
(Reporting by Maria Martinez; editing by Mark Heinrich)
