高盛-经济学研究：审视财政悬崖

GoldmanResearchSachs

EconoinicsResearch5November2026|10:58PMEST

GLOBALECONOMICSANALYST

PeeringDowntheFiscalCliff

■FiscaldeficitsacrossDMsareunsustainablywide,andoverallfiscalhealthisneartheweakestoutsideofmajorcrises.Fiscalrulesexistbuthavedonelittletohaltthedeterioration.ThoughmostDMshaveatleastoneruleinplace,compliancehasbeenmixedatbest,andgovernmentshaveincreasinglysuspendedor

loosenedtheminthepastdecade,especiallyafterthepandemic.Discretionaryconsolidationsfreelyenactedbypolicymakershavealsobecomeraresincethe1990s,withmostrecentconsolidationsdrivenbybindingfiscalrulesormarketpressure.

JohanAllen

+1(212)902-7465|johan.allen@

GoldmanSachs&Co.LLC

JosephBriggs+1(212)902-2163|

joseph.briggs@

GoldmanSachs&Co.LLC

■Market-drivenconsolidationsareusuallymorepainful.Whenenacted,theyhavehistoricallybeenmateriallylarger(asashareofGDP)thandiscretionaryand

rules-basedconsolidations.Evenatthesamesize,market-basedconsolidationshavehadalargerhittoGDPthandiscretionaryones(i.e.,theyhavehadbiggerrfiscalmultipliers).

■Togetherwithasharpincreaseininterestrates,alargedebt-stabilizinggap—thedistancebetweenacountry'sprimarybalanceandthelevelthatwouldkeep

debt/GDPstable—hasbeenagoodhistoricalpredictorofconsolidation.Whenthedebt-stabilizinggaphasexceeded4ppofGDP,asitdoestodayinFrance,theUSandtheUK,aconsolidationhasfollowedwithinthreeyearsalmosthalfthetime.

■Despitethechallenginglong-runoutlook,ourcountryeconomistsarenot

forecastingmeaningfulDMfiscalconsolidationin2027,astherecentrisein

globalyieldsdoesnotyetappearlargeenoughtopromptasignificant

reassessmentofthefiscalstance.Giventhesizeofitsdebt-stabilizinggapandthesharpriseinitsbondyields,Francelookslikethemostlikelycandidateforconsolidation,thoughourbasecaseisstillthatthedeficitexceedsthe5.0%

targetin2027beforedecliningin2028(theupcomingpresidentialelectionisakeysourceofuncertainty).

■Ourcountryteams'forecastsimplyaroughlyneutralfiscalimpulsein2027,reflectingcontinuedexpansioninJapanandGermany,consolidationintheUKandaflatimpulseintheUS.Butwithdeficitsthislarge,riskstogrowthare

skewedtothedownsidefrompotentiallylargerconsolidations.

Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto

/research/hedge.html.

GoldmanSachsGlobaiEconomicsAnaiyst

PeeringDowntheFiscalCiff

DMpublicfinancesareintheirworstshapeoutsideofacrisis,asmostmeasuresoffiscalvulnerabilitysitatornearthetopoftheirhistoricalrange(Exhibit1).TheUSandFranceparticularlystandout—bothhaverunwidegeneralgovernmentdeficitsforyears,whichcurrentlystandat8.5%and5.4%ofGDP,respectively(theUSfederalgovernment

deficitislower,at6.2%ofGDP,thoughstilltowardsthetopofitshistoricalrange).

Exhibit1:FiscalVulnerabilityMeasuresAreattheTopEndofTheirHistoricalRangeinMostDMs,ParticularlyintheUSandFrance

UnitedFranceUnitedAustraliaItalyCanadaGermanySwedenSpainJapan

StatesKingdom

FiscalBalanceGovemmentBalancetoGDP(%)

PrimaryBalancetoGDP(%)InterestExpensetoGDP(%)

-8.5

-4.9

-5.4

-2.9

-3.8

-3.2

-2.2

-2.9

-2.5

4.3

-34

-2.5

-24

-2.4

-0.2

-1.4

-1.2

-1.1

1.0

-2.6

-3.62.5

-2.6

-1.0

-3.9

0.1

-0.9-0.1

-2.1

-0.3

DebtGrossDebttoGDP(%)

NetDebttoGDP(%)

DebtCapacityUtilisation(NetDebt/Revenues)WeightedAverageMaturity(Years)

126.8118.5102.098.4111.393.4

331.3212.5235.3

52.6137.9115.6

64.6

49.6

105.8

35.1

97.6

82.1

199.4

34.0

93.0

128.5

268.7

9.3

22.1

138

29.5

127.0

187.7

352.6

5.88.1

11.0

6.4

7.0

6.88.3

4.4

7.6

9.4

ExternalExternalDebttoGDP(%)

CurrentAccountBalancetoGDP(%)

NeIntemationallnvestmentPositiontoGDP(%)

32.968.0

35.7

-2.8

10.7

57.1

20.6

35.1

0.8

55.2

0.2

-3.0

-0.2

-3.30.5

-0.2

4.4

6.2

2.7

5.3

81.6

-68.9

-28.8

4.2

24.113.850.980.964.0

-41.0

Market10YearTemPremium(bp)

10YearAssetSwapSpread(bp)

134

43

215

-151

178

-46

107267

10411284

195

218

-10

11-111

-21-825

-67

Redygeenrepresenthighendowerfiscslpressureininodcatorcomparedtohistoricrangeswithincounties.Calorsarenotcomparablebetweencounties

Source:IMF,Bloomberg,Eurostat,worldBank,BankofCanada,NationalStatisticalAgencies,HaverAnalytics,GoldmanSachsGlobalInvestmentResearch

Althoughhigherrateshaveraisedgovernmentinterestexpenses,thegreatestunderlyingchallengetofiscalsustainabilityiswideprimarydeficits.Forexample,France'sprimarybalancesits5ppofGDPbelowthelevelthatwouldstabilizeitsdebt-to-GDPratio,andtheUSandUKare4ppshort,assumingthateconomicgrowthstaysatpotentialandthatgovernmentscontinuetoborrowatcurrentmarketrates.(Exhibit2,LHS).The

debt-stabilizinggaphaswidenedacrossalllargeDMsthisyear,exceptinAustralia(Exhibit2,RHS).

Analternativeanchor,whichbenchmarksprimarybalancesagainstthedeficitthat

wouldbringthedebtlevelto90%ofGDPwithintenyears,suggestshigh-debtcountriesaremorevulnerable.Onthismeasure,Japanisfurthestfromtarget,followedbytheUS,ltalyandFrance.

1Despitearichacademicdebate,thereisnoconsensusonthe‘optimal'levelofgovernmentdebtandwe

recognizethatthislevellikelyvariesbetweencountriesdependingonfinancialdepth,countryriskand

institutionalfeatures.Wenonethelesschoose90%asacommonanchoracrosscountries,sinceitfallswithintherangeofreasonableestimatesandisbelowthedebtlevelofmostDMstoday.

5November20262

GoldmanSachsGlobaiEconomicsAnaiyst

Exhibit2:TheGapBetweentheDebt-StabilizingPrimaryBalanceandtheActualPrimaryBalanceisLargeandHasDeterioratedThisYear

France

UnitedStates

UnitedKngdom

Germany

Australia

Sweden

Japan

ltaly

Canada

Spain

LatestGap

Percent

ofGDP

-5

-6

GapBetweenRealizedPrimaryBalanceand

PrimaryBalancethatWouldStabilizeDebt/GDP

orDecreaseDebt/GDPRatioto90%

-8

■Stabilize

-10

Decreaseto90%

-14

Percent

ofGDP

Percent

ofGDP

-10

-12

-12

GapBetweenRealizedand

DebtStabilizingPrimaryBalance:

Startof2026VersusLatestGap

Spain

Canadanaly

Japan

Sweden

GermanyuntedStates

Australia

ImprovementUnited

Kingdom

France

Deterioration

Percent

ofGDP

GapatStartofYear

Source:OECD,LSEG,ReserveBankofAustralia(RBA),HaverAnalytics,GoldmanSachsGlobalInvestmentResearch

Itisnotuncommonforfiscalbalancestodivergefromlong-runsustainablelevels,andmacroeconomictheoryencouragesalooserfiscalstancetosupportaggregatedemandduringeconomicdownturns.

Butwearenotinaneconomicdownturn,andDMgrowthisrunninginlinewithpotential(despitethedragfromthewarinIranandUStariffs).Asimplemodelbasedonthe

outputgapandinterestcosts—whichtrackspastDMprimarybalancesreasonablywellhistorically²—impliesthatprimarydeficitsshouldhavekeptnarrowingafter2023toamoreneutralstatein2026,asroughlyclosedoutputgaps,healthyandstablelabor

markets,andhigherinterestbillsshouldhaveencouragedgovernmentstoconsolidatefiscalbalances(Exhibit3,LHS).Instead,DMprimarybalancesnowsitmorethan3ppofGDPbelowthelevelconsistentwithpastcyclicalresponses,reflectingalackof

post-pandemicconsolidationandadesiretosmoothoutnegativesupplyshocksfromthelastfewyears.

All-in-all,governmentshavenotfullyunwoundrecentcrisis-erafiscalsupportevenasthecyclehasnormalized,abreakfromthehistoricalpatterninwhichprimarydeficitsnarrowedonceoutputgapsclosed.Asaresult,DMdebtlevelshaverisenclosetoWorldWarllpeaks(Exhibit3,RHS).Ourcountryeconomists'baselineforecastssuggestthatdebtlevelswillcontinuetoedgeupfromhere.

2Usingdatathrough2019,weregresstheaggregateDMprimarybalanceontheoutputgapandinterestexpenseasashareofGDP,thencomparethemodel'sfittedvalueswithactualprimarydeficits.

5November2026

GoldmanSachsGlobaiEconomicsAnaiyst

5November20264

Exhibit3:FiscalDeficitsAreElevatedRelativetoCyclicalNorms,ContributingtoDebtLevelsRemainingHigh

Percent

ofGDP

DMPrimaryDeicitVersus

PercentDMDebttoGDPRatio

ofGDP

Percent

ofGDP

Percent

ofGDP

PrimaryDeficitImpliedbyHistorical

RelationshiptoOutputGap

-10

1990199419982002200620102014201820222026

Source:OECD,IMF,GoldmanSachsGlobalInvestmentResearch

FiscalRulesAreOftenBrokenorSuspended

Onereasonthatthefiscalsituationhasdeterioratedisthatwhilemostgovernmentsaresubjecttofiscalrulesdesignedtocontaindeficitsanddebt,theyhaveincreasingly

becomewillingtoignoretheserulesastheyprioritizenear-termeconomicgains,defensespendingandpoliticalconsiderations.

InExhibit4,wesummarizethemainfiscalrulesinmajorDMs(fulldetailsonbudgetrulesandprocessesaresummarizedintheappendix),scorehowfirmlyeachiscodified,andassesswhethercountriescomplywiththemtoday.Forthemostpart,theanswertothelastquestionisno.Forinstance,FrancebreachestheEU's3%ofGDPdeficitlimit,withadeficitabove5%³.Otherscomplyonlybecausetheyhavegrantedthemselves

exceptionsorchangedtherules.Germany,forexample,looseneditsdebtbrakein2025,whiletheUSCongressroutinelyraisesthedebtceilingandcircumventsitsownten-yearbudgetrulesbyassigningtaxcutsexpirydatesthatitrarelyhonors.

3UndertheEU'sreformedfiscalframework(inforcesinceApril2024),complianceisjudgedmainlyagainstamulti-yearnetexpenditurepathratherthanthe3%limit,andFrancehassofarbeendeemedbroadlycompliantwithitspathdespitebeinginanExcessiveDeficitProcedure.

GoldmanSachsGlobaiEconomicsAnaiyst

Exhibit4:MostCountriesHaveFiscalRulesthatLimitDeficitsandDebtLevels,AtLeastinTheory

Country

KeyConstraintsRule

CurrentlyinCompliance

HorizonforCompliance

UnitedStates

Debtceiling;StatutoryPay-As-You-GoProceduralonly

Exception

10Years

Germany

Debtbrake;StabilityandGrowthPactConstitutional+EU

Exception

1Year

France

StabilityandGrowthPact;ExcessiveDeficitLegislative+EUProcedure

No

3Years

Japan

PrimarybalancetargetLegislative

Exception

1Year

Canada

Self-setdebtanchorVoluntary

Exception

3Years

ltaly

StabilityandGrowthPact;ExcessiveDeficitNodomesticrule+EU

Procedure

Exception5Years

Sweden

Expenditureceiling;surplustargetLegislative+EUException

3Years

UnitedKingdom

StabilityandinvestmentrulesLegislative

Yes

3Years

StabiltyandGrowthPact:EUfscalrules;deficit≤3%ofGDP,debts60%oGDP.ExcesiveDefcitProcedure:iSGPisbreached;20.5%ofGDPannualstructuraladjustmentWecassifyrecenty-loosenedfiscalrulesascompliancewithanexception.

Source:GoldmanSachsGlobalInvestmentResearch

Thesearenotnewdevelopments.InExhibit5,wescoreeachcountry'scompliancewithitsfiscalrulessince1996,judginggovernmentsbythespiritofeachrulewhere

complianceisunclear⁴.Althoughbreacheshavealwaysbeencommon,whathas

changedishowgovernmentsloosenpolicy:theyincreasinglystaycompliantbygrantingthemselvesexceptionsorrewritingtherules.Suchcasesaccountformostcountry-yearobservationssince2020.

Exhibit5:Non-CompliancewithFiscalRulesIsaLong-StandingProblem,ExceptionsandRuleChangesHaveBecomeMoreCommon

Weclassifycompliancewithanexceptionaseitherfiscalrulesupranationalbodiesthatenablealooserfiscalstance.

changes,orreceivingaformalexceptionfromparliamentor

Source:GoldmanSachsGlobalInvestmentResearch

4Fiscalrulesareoftenvague,soweattempttoscorereasonablycharitably.Wecountacountryascompliantwithanexceptionifitchangedtherule,orreceivedaformalexceptionfromparliamentorasupranationalbodytoallowalooserfiscalstance

5November20265

GoldmanSachsGlobaiEconomicsAnaiyst

FiscalConsolidation:BettertoJumpBeforeYou'rePushed

Whererulesstopbeingbinding,marketseventuallystepin.UsinganIMFdatasetofDMfiscalconsolidationsfor17OECDeconomiesbetween1978and2020,weclassifyeachconsolidationbyitstrigger.Inadiscretionaryconsolidation,thegovernmentchosetotighten.Inarules-drivenone,afiscalruleforcedit.Inamarket-drivenone,thetriggerwasmarketstress,typicallyasharpriseinbondyields.

Thecompositionofconsolidationshasshiftedovertime(Exhibit6).Discretionary

consolidationsweremostcommoninthe1980s,whilerules-drivenconsolidationstookoverfromthe1990s,asgovernmentsincreasinglyadoptedfiscalrules.Sincethe2010s,theshareofmarket-andrules-drivenconsolidations—whichoftenoverlap—haverisenwhilediscretionaryconsolidationshavebecomerarer.

Exhibit6:Historically,PoliticalPressuresLedtoMostConsolidations,butRecentConsolidationHasLargelyBeenRules-drivenorMarket-driven

Numberofobservations

CountofConsolidationEpisodesbyCategory

Numberofobservations

Source:Adleretal“AnUpdatedAction-basedDatasetofFiscalConsolidation”,GoldmanSachsGlobalInvestmentResearchMarket-drivenconsolidation,whilelesscommon,hastendedtobelargerinsize.Mostdiscretionaryandrules-drivenconsolidationshavebeenbetween0-2%ofGDP/year,whileamaterialshareofmarket-drivenconsolidationshaveexceeded2%ofGDP/year(Exhibit7,LHS).

Thoughdiscretionaryconsolidationshavebecomelesscommon,theyhavehistoricallybeenthemostbenignformofconsolidation.Theconsolidationsinourdatasetimply

thateach1%ofGDPofdiscretionaryfiscaltighteningonaverageloweredthelevelofGDPby0.6%afterfouryears,against0.8%formarket-drivenand1.0%forrules-driventightening—meaningthatevenatthesamesize,adiscretionaryconsolidationhas

historicallybeenlesspainful(Exhibit7,RHS)⁵.Sincemarket-drivenconsolidationsareusuallymuchlarger,theyhaveinaggregatethemostnegativeimpactongrowth.

5WeestimatetheGDPresponseusinglocalprojectionswithcountryandyearfixedeffects.Wesuspectrules-drivenconsolidationshurtmostperunitbecauseitisthelikeliestformofconsolidationtobetriggeredduringaneconomicdownturnandappliedwithoutdiscretiontoitseconomiccosts.

5November20266

GoldmanSachsGlobaiEconomicsAnaiyst

Exhibit7:Market-DrivenConsolidationsHaveBeenLargerThanDiscretionaryConsolidationsandledtoMorePronouncedHitstoGDP

Percentof

Country-Years

DistributionofAnnualVoluntaryvs

ConsolidationMandatory

Size:

PercentofCountry-Years

15

10

PercentGDPImpactper1ppofGDPConsolidatedPercent

0.2

0.2

0.0

-0.2

-0.4

-0.6

-0.8

0.0

-0.2

-0.4

——Discretionary

—Market-driven

Rules-diven

-0.6

-0.8

-1.0

-1.2

-1.2

AnnualSizeofConsolidation(PercentagePointsofGDP)

YearsAfterConsolidationStats

Source:Adleretal“AnUpdatedAction-basedDatasetofFiscalConsolidation”,GoldmanSachsGlobalInvestmentResearch

IsNear-TermConsolidationLikely?

Historically,consolidationaccordingtotheIMF'sdefinitionfollowedmorethanhalfthetimeoncethedebt-stabilizingprimarydeficitgap(Exhibit2)exceeded4ppofGDP.

Alreadywhenthegapliesbetween2-4ppthereisaoneinthreechanceofconsolidation(Exhibit8,LHS).Sharprisesinyieldssendasimilarsignal—whenacountry's10-year

yieldhasrisenbymorethan100bprelativetotheDMmedian,consolidationfollowedaroundathirdofthetime(Exhibit8,RHS).

Exhibit8:TheProbabilityofFiscalConsolidationIncreasesSharplywhenthePrimaryBalanceGapexceeds4ppandWhenYieldsRiseSubstantially

FiscalConsolidationOnset:RequiredAdjustmentandYieldChangesover3years

ProbabilityofFiscalConsolidationOnset

Percent

WouldStabiliseDebt/GDP(ppofGDP)

GapBetweenActualPrimaryBalanceandPrimaryBalancethat

ProbabilityofFiscalConsolidationOnsetPercent

Changein10yyieldvspeer(bp)

Source:Adleretal“AnUpdatedAction-basedDatasetofFiscalConsolidation”,GoldmanSachsGlobalInvestmentResearch

Takenatfacevalue,theseprobabilitiesjointlysuggestFranceisthemostlikelycandidateforconsolidationgivenits5ppdebt-stabilizinggap,followedbytheUKandtheUS

5November2026

GoldmanSachsGlobaiEconomicsAnaiyst

(Exhibit9).Japan'sprobabilityispushedupduetotheyieldsignal.OurratesstrategistsattributemuchoftheriseinJapaneseyieldssincethepandemictohigherexpected

debt-servicingcosts,thoughtheyseerecentJPYratevolatilityasdrivenbynon-fiscalfactors.

Exhibit9:HistoricalConsolidation

Reactions

SuggestFranceIstheMostLikely

ProbabilityofFiscalConsolidation

Candidate

for

a

Source:Adleretal“AnUpdatedAction-basedDatasetofFiscalConsolidation”,GoldmanSachsGlobalInvestmentResearch

Still,ourcountryeconomistsdonotforecastmeaningfulDM-widefiscalconsolidationin2027(Exhibit10).Globalinterestrateshaverisen,butnotyetenoughtoovercome

near-termpoliticalincentivesandforcegovernmentstotighten,andweexpectthemtodeclinesomewhatoverthecomingmonths.

Consistentwithouranalysis,themostlikelycandidateforafiscalconsolidationisFrance,givenitswidedeficitandtherisingpressureonOATS.Thatsaid,ourbasecaseisthatnomeaningfulprogresstakesplaceuntilatleastafterthe2027elections.Wetherefore

expectthedeficittoremainat5.4%ofGDPin2027,aboveboththegovernment's5.0%targetandthe3.0%Maastrichtcriteriarequirement,beforedecliningbelow5%in2028.

Elsewhere,oureconomistsexpectfurtherfiscalexpansioninGermanv.Japanand.toalesserextent,Italy.TheyareexpectingsmallerconsolidationsinCanada(reflecting

paybackfromanoutsizedexpansionthispastyear)andSpain.

5November20268

GoldmanSachsGlobaiEconomicsAnaiyst

5November20269

Exhibit10:WeExpectFurtherFiscalExpansioninGermanyandJapan,ConsolidationElsewhere

CountryDiscretionaryChangesin2027

UnitedStates

Debtceilinglikelytobecomebindinginmid-to-late2027,requiringcongressionalaction.

Germany

Expansionary:Positivefiscalimpulse,drivenbydefense(to3.0%ofGDP)andinfrastructureandcimatefundinvestment.Deficitwidensfrom4.0%

to4.6%ofGDP

France

Modest,delayedconsolidation:5.0%deficitarget,butGSforecastis5.4%.ElectioninApril2027providesuncertainty

apan

Expansionary:record¥143tnbudgetrequests,drivenby~¥12tngrowth

investment(Al,chips,criticalminerals),moredefenceandanApril2027consumptiontaxcut.Primarydeficitwidens~1ppto~1.5%ofGDP.

taly

Slightlyexpansionary:about+0.6%ofGDP(0.3%defenceand0.3%energymeasures)viatheNationalEscapeClause

Spain

Continuedconsolidation:RecoveryFundsupportfades(onlyresidualspendingin2027);29Novembersnapelectionislikelytoreinforcetightening.Debt-to-GDPkeepsfalling.

Unitedkingdom

Continuedconsolidation,asspendingpressuresandhigherinterestrateswillleadtoachallengingspendingreviewin2027withdificultfiscaltradeoffs.

canada

Slightconsolidationaftertheprioryear'sexpansion,partlyoffsetbylowereffectivecorporatetaxationfromacceleratedinvestmentincentives.

sweden

Slightlycontractionary:slightpaybackaftermodestexpansionaheadof2026election.

Australia

Neutraltoslightlynegative:2027budgetomittednear-termsupportanddelayeddeliveryofWorkingAustralianTaxOffsetto2028,butprojectionsstillimplynewnetpolicy-relatedspending.

Source:GoldmanSachsGlobalInvestmentResearch

FiscalImpulseControl

Ourcountryteams'forecastsimplythatthefiscalimpulsetoDMGDPshouldturnfrompositivethroughoutmostof2026toroughlyneutralin2027(Exhibit11).Japanprovidesthelargestboost(+0.7ppofGDPin2027),followedbyGermany(+0.3pp).TheUSfiscalimpulseisflat,whiletheUKandAustraliaseethemostnegativeimpulse.InFrance,weareforecastingaslightconsolidationafterthepresidentialelection,contributingtoa

0.4ppfiscaldragtoGDPin2028.

Exhibit11:TheDMFiscallmpulseLooksRoughlyNeutralin2027

FiscalImpulses

Percentagepoints0.8

0.6

0.4

0.2

0.0

-0.22026

2027-0.42028

-0.6AustraliaCanadaFranceSwitzerlandGermany-0.6

Percentage0.8

0.6

0.4

02·

0.0

-0.2·

-0.4-

pointsFiscalImpulsebyCountry

Percentagepoints,annualrate0.2

0.1

0.0

-0.1

-0.2-0.2

-0.3Q1Q2Q3Q4Q1Q2Q3Q1Q2Q3Q4Q1Q2Q3Q4-0.3

2025202620272028

Percentage

annualrate0.2

0.1·

0.0-

G10FiscalImpulse

(GDPFXweighted)

points,

Japan

Source:GoldmanSachsGlobalInvestmentResearch

Butwithdebtanddeficitsthislarge,thebalanceofoutcomesisskewedtowards

GoldmanSachsGlobaiEconomicsAnaiyst

5November202610

larger-than-expectedfiscalconsolidationinDMeconomies.Ifthisoccurs—and

especiallyifconsolidationultimatelyisforcedbymarketpressure—fiscalpolicycouldbecomeamaterialdragongrowth.

JohanAllen

NoamKoher*

JosephBriggs

*NoamisaninternontheGlobalEconomicsteam.

GoldmanSachsGlobaiEconomicsAnaiyst

5November202611

Appendix

Country

FiscalBudgetProcessConstraintsonDeficitKeyDates

UnitedStates

ThePresidentsubmitsabudgetrequest,butCongresswrites

thebudget.Annualspendingbillscoveronlyaboutaquarterofoutlaysandmustpassby30Septemberorfundinglapses.Therest-pensions,heathcare,interest—runsonstandingLawandchangasonlywhanCnnarasslaaislatas

WeakestintheG10—nodeficitordebtrule.Spendingcaps

expiredin2025;pay-as-you-goisroutinelywaived.Largefiscalpackagescanpassbysimplemajoritythroughaprocesslimitingmeasures'duration,notcost.Thedebtceiling,theonlyhard

numharrosaS5trnin2025

MidtermsNov2026,newCongressJan2027;CBO

budgetoutlookearly2027;fundingdeadline30Sep

2027;2025taxcutsstartexpiringend-2028.

Germany

Cabinetagreesthedraftbudgetinthesummer;parliamentdebatesiintheautumnandpassesitinDecemberforthefollowingyear.Coalitiongovernmentsmeanthenumbersare

setledinpartynegotiationsbeforeparliamentseesthem.

StrongestintheG10—aconstitutionalborrowinglimitcapsthestructuraldeficitat0.7%ofGDP(0.35%federaland0.35%for

thestates).Butitwasamendedin2025toexemptdefence

spendingabove1%ofGDPandtocreateaC500bnoff-budget

infrastructureandclimatefund,soheadlineborrowingcannowrisewellabovethecap.Changngtherulefurtherrequiresatwothindemaiaritvinbathchambors

2028budget:cabinetdraftJun/Jul2027,parliament

passesNov/Dec2027;taxrevenueprojectionsinMayandNov;nextfederalelectiondue2029.

France

Sovemmentsetsthebudgetintheautumn;partliamentmust

passitbyyear-end.Thegovernmentcanforceitthroughwithoutavote,atthe