Germany's lower house of parliament on Friday approved the suspension in 2023 of a self-imposed cap on borrowing for the fourth consecutive year after a constitutional court ruling last month tore up the government's spending plans.

The decision required an absolute majority in the Bundestag, with more than half of the members voting in favour. There were 414 votes in favour, 242 against it and nine abstentions.

The German government justified the suspension of the constitutionally enshrined debt brake, which limits net debt borrowing to 0.35% of GDP, with the war in Ukraine.

German lawmakers also approved on Friday a higher carbon dioxide surcharge that will increase fuel and heating costs, as part of a revised 2024 budget agreed by the coalition to avert a spending crisis.

The surcharge increase, part of a range of measures agreed to plug a multibillion-euro hole blown in the budget by a constitutional court ruling, was passed with the majority of the three coalition parties.

The CO2 price will rise from the current 30 euros per tonne to 45 euros as of Jan. 1, 2024. This is likely to increase the price of petrol by around 4.5 cents per litre.


(Reporting by Holger Hansen and Maria Martinez, Editing by Miranda Murray and Linda Pasquini)