Germany Leaves Door Open to Breaching Debt Rules Again Next Year.

Germany's ruling coalition has reached an agreement to reinstate restrictions on new borrowing next year, following a recent court ruling that struck down a critical funding tool. The agreement includes measures such as cuts to climate investment and fossil-fuel subsidies, an increase in the carbon price, and a strategy to sell assets. However, the agreement is provisional and lacks specific details. The new budget plan will need to be approved by lawmakers and is not expected to be finalized by the end of the year. Chancellor Olaf Scholz emphasized that the government will continue to prioritize climate transition, social cohesion, and support for Ukraine's defense, but acknowledged the need for budget cuts and savings. The government will reassess funds for Ukraine and may lift the borrowing restrictions in 2024 if necessary. The court ruling has sparked calls for an overhaul of Germany's borrowing rules to support investments in a more sustainable and technologically advanced economy. German industry groups have expressed relief at the resolution of the budget standoff, but have criticized certain decisions, such as the abolition of subsidies for grid fees. [Extracted from the article]