Why Germany’s Debt Brake Relaxation May Not Benefit Greece

While the constitutional review of Germany’s debt brake is considered by analysts as a ‘good’ scenario for the EU and global markets, there are reservations within Germany itself about how beneficial this would be for highly indebted European countries. One such country is Greece, as noted by renowned German economist Veronika Grimm during a parliamentary debate in Germany’s Bundestag on March 13, 2025. Grimm pointed out that the proposed €900 billion economic package, which increases public borrowing limits and extends durations beyond the Commission’s proposal, could have negative consequences if only Germany, and not the entire EU, passes a decade-long exception to its escape clause. According to Grimm, this could lead to other EU countries demanding longer fiscal exemptions, weaken Germany’s role as a potential lender, and increase interest costs cutting into investment budgets.