Germany will change its constitution to ban excessive public borrowing and impose strict new rules to ensure the extra debt created by its latest fiscal stimulus package is paid off as soon as possible, Angela Merkel, the chancellor, said on Tuesday. The amendment would make it illegal for any government to raise the state’s public deficit above 0.5 per cent of GDP “in normal economic times”. For 2008, such a rule would have capped borrowings at €12bn. Ms Merkel’s comments were made as she unveiled a two-year €49.25bn package of growth measures, including public investments and tax cuts. These will raise the amount Berlin is spending to fight the economic crisis this year to 1.5 per cent of gross domestic product.

This entry was posted by Stacy-Marie Ishmael on Wednesday, January 14th, 2009 at 5:26 and is filed under Capital markets, People. Tagged with angela merkel, germany. Edit this entry.