Subnational debt has long been recognized as a threat to the national fiscal balance. Federalist countries, such as Germany, where subnational entities have considerable autonomy, have long focused their efforts on constraining their fiscal deficits. In Germany a continued bargaining process between the federal state and the Bundeslander has resulted in a constitutional amendment (Foderalismusreform II) that mandates the Bundeslander to have balanced budgets from 2020 onwards, leaving open how the objective can be reached. In order to meet the target both the federal government and several...
Subnational debt has long been recognized as a threat to the national fiscal balance. Federalist countries, such as Germany, where subnational entitie...
