As the Germans are ready to vote on Sunday, slow economic growth in their country will be the height of their minds alongside immigration and the Ukraine war.

The financial mechanism known as the debt brake, which strictly limits government borrowing, has become a mistake in German policy with the collapse of the recent government in this issue.

The third largest economy in the world for the second year in a row, as politicians ask whether this financial jacket hinders investment that may enhance growth.

Although a large number of potential voters are still unlimited, the conservative Christian Democratic Union of Friedrich Mirz (CDU) is the preferred clear to become the largest party in Parliament. The extreme right -wing alternative to Germany (AFD) has made great gains in recent years on the back of the anti -immigration agenda, and put opinion polls in second place.

So what are the debt brakes, and why became the issue of a major election in the largest economy in the eurozone?

What is the debt brakes?

The debt brakes, or “Schuldenbrentse”, cut 0.35 percent of the GDP in Germany – with the exception of emergency situations – and prevents its 16 states from obtaining new debts. It is designed to prevent irresponsible government spending.

It was presented in 2009 under the leadership of former Chancellor Angela Merkel in the wake of the global financial crisis. While Al Qaeda entered into force in 2016, it was suspended during the Covid-19 and again after Russia’s invasion of Ukraine. The legislation was re -legislative last year.

In her recent memoirs, Merkel called Germany to relax debt brakes in a sign of increasing political pressure to reform a base that many economists said was very flexible.

Germany has the lowest debts of the large euro region economies. In Italy, government debt rate is 141 percent of GDP. In France, it is 112 percent. In Germany, only 65 percent. In the view of the International Monetary Fund (the International Monetary Fund), debt sustainability is not an urgent issue for Berlin.

This is reflected in public opinion. Fifty -five percent of the Germans now support strict borrowing limits, compared to 32 percent in July, according to a poll conducted by Forsa on behalf of the German Council for Foreign Relations.

Will the German economy benefit from more public investment?

Before the end of this week, opinion polls show that the money is at the head of the voter minds. For a good reason. Economic growth has been anemia since 2019 and negative since 2023. The experts of foreclosure are also declining in growth for 2025.

Germany has long been a manufacturing force, and Germany has faced increasing competition from China. Industrial work decreased as a share of total workers from 40 percent in 1990 to 27 percent today.

The amazing industrial sector in Germany can be exposed to a possible trade war with the United States. The demand for its main exports – machines, cars and industrial tools – fluctuates with wider global growth, which will fall into a higher global tariff.

The country’s transportation, energy and housing in the country also needs to be promoted.

Elsewhere, Berlin spends 2.1 percent of GDP on defense, a higher touch of NATO’s annual goal. But this is thanks to a fund 100 billion euros (105 billion dollars) was created for the war in Ukraine. The Fund is expected to dry by 2027, and Berlin will face difficult questions about how NATO’s obligations will be broken without breaking its financial rules.

It is more than the clay that the population of Germany is advancing. It is expected that the number of people over 64 years old will grow by 41 percent to 24 million by 2050, which represents nearly a third of the population. The percentage of work to retired people will decrease, which will reduce a tax base.

Fears about Germany’s economy also undermined private investment, which are included in high corporate tax rates.

However, debt brakes have prevented successive governments from widespread spending projects. Public investment has been stable in about 2 to 3 percent of GDP in recent years, which is low compared to other countries in the region.

The result is that the highway in Germany set 45 billion euros (47 billion dollars) of investment needs, there is a shortage of the country is 800,000 homes and the declared goal of achieving clear net carbon emissions by 2045 will require tens of billions of additional euros spend every year .

Treating the numerous structural challenges in Germany will cost about 600 billion euros (628 billion dollars) by 2030, according to the German Economic Institute.

Many economists call on government to benefit from the space of financial fluctuation to enhance production.

“Any serious efforts to reform and improve the German economy must come with financial motivation,” Carsten Barzky, the global head of macro research at the Dutch Bank.

He added: “Finding the financial space for all the policies required exclusively in austerity seems to be an impossible task.” As such, any new government will have to “agree on light financial policies [i.e., relaxing the debt brake]Prest said.

Why is an important election issue?

The debt brake was behind the collapse of the ruling coalition in November. Counselor Olaf Schools prompted his comment on a budget project to pay additional spending costs in Ukraine. But this was resisted by Finance Minister Christian Lindner of the Free Democratic Party (FDP). Lindner was later rejected.

With no party to win a direct majority in Sunday elections, coalition talks may continue for several months. The first priority for the new government will be to agree on this year and 2026 budgets.

While Merz, the net filter to become a consultant, promised to “support” the debt brakes, he left the door open to change.

“Of course, it can be fixed,” said Mirz. “The question is why, for any purpose.” He said he will not follow an additional metaphor for more spending on social welfare. But if the additional borrowing will enhance the investment “the answer may be different,” he said.

On a large scale, the liberal FDP, the conservative CDU, and the right -wing AFD want to cut the government red strip, reduce the benefits of social care and maintain the current financial rules. On the other hand, left -wing parties, such as the Social Democratic Party in Schools (SPD) and vegetables, want to relax debt brakes and public investment.

According to Shaheen Valley, an older research colleague at the German Council for Foreign Relations, “the economic slowdown has affected the political situation.”

Many commentators believe that years of low growth and stunning economic frustration are partially responsible for the AFD anti -Foundation’s rise.

What is the future of Germany’s debt brakes?

The Central Bank in Germany has long called for adjustments to the financial mechanism that would allow a small increase in borrowing. Most critics only expect a limited relaxation instead of fully repairing the borrowing cover.

But even this will not be easy. Any change in the base requires a majority of two -thirds in both the upper and lower parliament. AFD, which blames low growth on environmental regulations and collective migration, opposes financial reform as does FDP’s Lindner.

Although Mirz recently issued legislation to combat immigration with the support of AFD, he refused to form an alliance government with the party, which is expected to win 20 percent of Sunday’s vote.

As such, Mirz will have to form a coalition with one or two parties in the Shuls government, SPD and Greens, which is voted in third and second before the elections.

One of the possibilities in the Democratic and Green Party is the condition of their entry into an alliance with Mirz’s approval to remove some of the elements of spending-especially on investments related to climate change-completely from the brake.

For Vallee, the debt brakes reform now “on the table … due to the increasing consensus in Germany that the fiscal policy should be modified. I think in its depths, Mirz is secretly happy to force him to spend a higher public spending before a [left-wing] Alliance partner. “