Slamming on the brakes – DW – 05/29/2009
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Slamming on the brakes

May 29, 2009

Germany edges closer to agreeing a law that would make it illegal for its states to incur new debt after 2020. It would also place a strict ceiling on the national debt.

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Germany hopes to put a stop to the cash drainImage: DWMontage

The German lower house of parliament, the Bundestag, has decided to put the brakes on the country's spiralling debt by agreeing to introduce a reform that would prohibit all of the country's 16 states from incurring new debt from 2020 and restricting the country as a whole to debt no higher than 0.35 per cent of its gross domestic product.

The motion was approved with a two-thirds majority, passing through the Bundestag with 418 of the 575 deputies voting in favor while109 voted against and 48 abstained.

The law must still pass through the Bundesrat, the upper house of parliament, also with a two-thirds majority. The new debt restrictions would replace the current regulations, which have failed to prevent an increase in the national debt to more than 1.5 trillion euros ($2.1 trillion) over the past 40 years.

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Editor: Chuck Penfold

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Bundestag decides to put brakes on spiralling debt (29.05.2009)

With the German government being pressured to bail out companies in the auto and retail sectors at a time of falling tax revenues - the lower house of parliament, the Bundestag, has decided to put the brakes on spiralling debt. It's agreed to introduce a reform that would prohibit all of the country's states from incurring new debt from 20-20 onwards and would also restrict the country as a whole to debt no higher than point -35 per cent of its gross domestic product. The motion was approved with a two-thirds majority. +++MAZ+++
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