The German lower house of parliament, the Bundestag, has decided to put the brakes on the country's spiralling debt by agreeing to introduce a reform that would prohibit all of the country's 16 states from incurring new debt from 2020 and restricting the country as a whole to debt no higher than 0.35 per cent of its gross domestic product.

The motion was approved with a two-thirds majority, passing through the Bundestag with 418 of the 575 deputies voting in favor while109 voted against and 48 abstained.

The law must still pass through the Bundesrat, the upper house of parliament, also with a two-thirds majority. The new debt restrictions would replace the current regulations, which have failed to prevent an increase in the national debt to more than 1.5 trillion euros ($2.1 trillion) over the past 40 years.

nda/AP/dpa/AFP

Editor: Chuck Penfold