CDU set all of their political capital on fire for debt brake overhaul, literally forget about EU fiscal rules that prohibit their spending orgy anyway

We live in an era of unique and remarkable incompetence

You may recall that Germany’s centre-right Union parties campaigned on a platform of fiscal responsibility.

You may also recall that as soon as they “won” the elections – a term I use freely, because their 28.6% showing is their second-worst in history – the CDU and CSU pivoted to a massive and unannounced overhaul of the German debt brake. This was the very constitutional instrument that their Chancellor candidate, Friedrich Merz, had spent months defending. Between November 2024 and February 2025, few were so enamoured of the debt brake as Merz. Within literally hours of the election, however, Merz became the debt brake’s foremost opponent. He immediately opened negotiations with the Social Democrats to blow a massive hole in its spending limits, so that the Federal Republic can take on something in excess of 1.5 trillion Euros in debt over the coming decade.

When you do things that you have spent months denouncing, you alienate your voters. The debt brake overhaul is a primary reason that the AfD have become the strongest-polling party in Germany and that the CDU find themselves locked on a course of indefinite decline.

That’s bad enough, but it gets worse. Today we learn that those crack budgetary geniuses in the CDU might have overlooked a few details. Those unprecedented fiscal understanders, who spent months telling us why we needed a debt brake and then a fevered few weeks telling us why the debt brake was a bad idea, forgot a few minor things. For example, they forgot all about EU fiscal rules that Germany helped establish in the first place and that actually prohibit their spending orgy.

From Handelsblatt:

…. It turns out that the recently reformed EU debt rules, which Germany itself tightened, may stand in the way of the CDU/SPD spending offensive. This is according to a study by the Brussels-based think tank Bruegel …

Unless Germany generates a budget surplus, it will “not be able to spend anything from its [debt-based, 500 billion-Euro] special infrastructure fund” due to EU requirements, write the two authors of the study, Bruegel director Jeromin Zettelmeyer and Armin Steinbach from the Paris business school HEC …

And even Friedrich Merz’s bold statement that Germany will now do “whatever is necessary” in terms of defence spending is nothing more than lip service, according to the study. This is because … EU rules would also strictly limit … defence spending.

This was a total oversight. His triviality the pigeon Chancellor Friedrich Merz, along with the entirety of CDU, CSU and SPD leadership just forgot about EU debt requirements. Or, as Handelsblatt delicately puts it, “the coalitions partners … did not take sufficient account of the impact of EU debt rules when drawing up their programme.”

You might be thinking that certainly it could not get any worse than that, but dear reader it could, and it does! These debt rules emerge from a reform of the EU “Stability and Growth Pact” that was enacted just last year – largely because Germany wanted to stop other EU member states from borrowing billions for insane projects, which is exactly what Germany wants to do now. This reform caps debt at 60% of GDP. The CDU/SPD spending bonanza would however drive German debt to 90% or more of our GDP, a clear violation of the rules that, again, we ourselves insisted on.

If you exceed that 60% debt limit, the Stability and Growth Pact requires your country to work out a “four-year debt reduction plan” in consultation with the EU Commission. Your nation’s prospects for economic growth matter a lot when it comes to sorting out how much flexibility you’re allowed, and so Germany can expect to be especially screwed in this area. We have seen basically no economic growth for three years in a row.

Now, does this mean Merz is done for, as some have suggested? No. When it comes to things like stopping mass migration, the EU is this great prohibitive body. Our politicians tell us that we cannot do anything because of EU this and EU that. When it comes to spending rules that Germany itself enacted, however, or really anything our politicians genuinely and seriously want to do, the EU morphs mysteriously into something approaching a mere advisory body. Perhaps the reformed Stability and Growth Pact will have to be reformed once again and Germany’s debt brake overhaul will be generalised to all of Europe. Everybody will get to max out their credit cards on infrastructure and defence. Or perhaps Germany will just spend its debt as it wishes and we will ignore these rules.

In the meantime, I will gloat at the profoundly stupid people who rule us. Because my god, are they dumb.