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Germany fiscal mess

The strange thing is that the fiscal mess has nothing to do with economics. Germany is the envy of the rich world because it still has room to borrow. Its public debts are equivalent to about 65% of gdp, compared with an average of 90% across the oecd club of mostly rich countries. Germany may pride itself on its fiscal prudence, but over the past fortnight it has been in the grip of a bizarre fiscal panic. At the heart of the drama lies the much-revered “debt brake”, a constitutional clause that limits the country’s budget deficit, but which the government has resorted to circumventing through a series of special funds.As lawmakers have scrambled to plug fiscal holes, members of the ruling coalition have resorted to squabbling and the opposition are divided, too.On November 15th the country’s constitutional court ruled that one such wheeze to finance €60bn ($66bn), or 1.5% of gdp, in climate spending was illegal, jeopardising all the financing done in this way. Can the mess be attributed to Ukraine war ?

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