Germany's Coalition Parties Clash Over Budget Crisis and Debt Brake

Germany's coalition partners, the Social Democrats (SPD), Greens, and Free Democrats (FDP), failed to resolve a 17-billion-euro hole in next year's budget, increasing uncertainty about financial plans in Europe's largest economy. The budget crisis arose when the Constitutional Court blocked the reallocation of unused pandemic emergency funds to climate projects. The parties are at odds over whether to lift Germany's self-imposed limit on net new borrowing in 2024, known as the debt brake. The FDP opposes lifting the debt brake and favors spending cuts, while the Greens want to invest in climate projects. The coalition's failure to reach an agreement has raised tensions and boosted support for the opposition conservatives and far-right Alternative for Germany (AfD).