Germany eyes EU extension to rein in spending as recession bites

As part of the revamped framework, countries exceeding key debt limits have four years to get back in line before they face disciplinary measures. Those requiring a longer adjustment period, however, are entitled to request an extension of up to seven years if necessary.

So far, only Italy, Spain and Finland have applied for a seven-year extension.

“The possibility of extending the adjustment period from four to seven years is currently being discussed,” said a German finance ministry official.

As of April when the rules were implemented, Brussels requires countries with relatively low debts such as Germany to cut the ratio between public debt and growth by an average of at least 0.5 percent per year.

Meeting this requirement in only four years would require a major fiscal adjustment from Germany’s fractious and unpopular government, led by the center left.

A seven-year adjustment plan, however, spares it from having to impose overly onerous spending cuts ahead of national elections slated for September 2025.