New German finance minister hopes for compromise on EU budget rules

DPA

Mon, May 12, 2025, 8:24 AM 2 min read

The new German finance minister, Lars Klingbeil, expressed optimism on Monday that Germany will not face penalty proceedings for potentially breaching European Union budget rules.

The bloc's reformed debt and deficit rules offer more flexibility, said Klingbeil, as he arrived at his first meeting with EU counterparts in Brussels.

Most important is that Germany carries out structural reforms to boost its economy, the minister said.

Even before formally coming in to power, the governing parties in Berlin agreed on a massive financial package for defence and infrastructure reforms.

Under the EU rules, a member state's debt level must not exceed 60% of its economic output, while the deficit must remain below 3% of gross domestic product. Exceeding these limits can trigger penalty proceedings.

A recent reform has granted EU members more time to comply with the rules. In addition some countries, including Germany, requested the commission to exempt certain defence expenditure from the deficit.

Some experts nevertheless argue that Germany will not be able to meet the EU's debt targets.

Klingbeil said he already held first consultations with some other European countries.

"The signal is always very clear. Everyone thinks it is right for Germany to take on more responsibility, to invest more in infrastructure, in security and, therefore, also in the economic strength of our country and the continent," he said.

"I am very optimistic and confident that we will be able to find a common path with the commission," Klingbeil added.