Schuldenbremse der Bundesländer: Auswirkungen der Strukturkomponente

The March 2025 constitutional amendments have fundamentally changed the fiscal policy framework in Germany: for the federal states, the debt brake was expanded by introducing a structural borrowing component amounting to 0.35% of GDP. Using the example of the Hessian state budget, this article studies the impact of the new legal borrowing options on Hesse’s fiscal leeway and long-term debt sustainability. It shows that making use of the structural borrowing component does not jeopardise the long-term sustainability of the state’s debt. At the same time, the financial relief from the new borrowing option diminishes over time as interest burdens rise continuously due to the additional debt. In effect, the new borrowing option primarily alleviates short-term pressure to consolidate the state budget. However, the existing need for fiscal consolidation is merely deferred into the future. To preserve fiscal leeway for future generations, it may be advisable to gradually phase out the use of the structural borrowing component over time.