Abstract
The new EU fiscal rules and the reformed German debt brake differ fundamentally. While the debt brake considers the structural balance of the core budgets of the federal and state governments, the EU rules focus on the growth of spending in the entire government sector. Neither rule is systematically stricter, so compliance with one rule does not guarantee compliance with the other. To make matters worse, because the new EU rules relate to general government spending, they are difficult to break down to the federal German level. This weakens the binding effect of the rules. The consequence: excessive spending growth in Germany becomes more likely.