Name: Germany to double net borrowing for 2021 to fight pandemic impact
Brand: reuters.com
SKU: reuters-com-2442
Availability: OnlineOnly

critic

Germany to double net borrowing for 2021 to fight pandemic impact

preview

By BERLIN (Reuters) - Germany plans to almost double the borrowing it had planned for next year to finance emergency aid for businesses during the second wave of the COVID-19 pandemic, Finance Minister Olaf Scholz said on Friday.The parliamentary budget committee agreed to a debt figure of almost 180 billion euros ($215 billion) - the second largest amount of net new borrowing in the history of post-war Germany.“Our goal is to overcome this pandemic and grow out of it with full strength next year,” Scholz said during a virtual news conference, adding that the stimulus package for this year and next would result in new debt of more than 300 billion euros.“We know that these are exceptional budgets in 2020 and 2021,” said Scholz. He added that the budget provided for financial support to be extended until June 2021.The new debt approved for 2020 will “by far” not be exhausted, said Scholz, and much will be postponed until next year.Germany will extend and tighten a partial coronavirus lockdown and keep bars, restaurants and entertainment venues shut until at least Dec. 20.Chancellor Angela Merkel has suggested that the restrictions may well extend into early next year if infection numbers don’t fall significantly.“The high debt is necessary to bring our country safely through the pandemic,” said Eckhardt Rehberg, a lawmaker of Merkel’s Christian Democrats (CDU). “We must once again make use of the exemption rule from the debt brake.”Enshrined in the constitution, the brake restricts the issuance of new debt by limiting the federal budget deficit to 0.35% of economic output. Parliament suspended it this year in light of the pandemic.Merkel’s government has already taken unprecedented steps to help companies and small businesses get through the crisis, freeing up billions of euros to soften the pandemic’s impact on the economy.The planned new debt of 179.82 billion euros for 2021 compares to 96 billion euros initially envisaged by Scholz in September.Economy Minister Peter Altmaier, speaking during the same news conference as Scholz, said he did not expect lockdown measures to produce a “major wave” of insolvencies in the last two months of the year given businesses can draw on financial lifelines.“I believe that for the sectors primarily concerned (...) we have - through the November and December aid - created a possibility for the economic consequences to remain within manageable limits,” he said.The government expects the economy to shrink by a calendar-adjusted 5.9% in 2020 and rebound by 4.4% in 2021.($1 = 0.8388 euros)Reporting by Holger Hansen; Additional reporting by Caroline Copley; Writing by Madeline Chambers, Joseph Nasr; Editing by Toby ChopraOur Standards:

By BERLIN (Reuters) - Germany plans to almost double the borrowing it had planned for next year to finance emergency aid for businesses during the second wave of the COVID-19 pandemic, Finance Minister Olaf Scholz said on Friday.The parliamentary budget committee agreed to a debt figure of almost 180 billion euros ($215 billion) - the second largest amount of net new borrowing in the history of post-war Germany.“Our goal is to overcome this pandemic and grow out of it with full strength next year,” Scholz said during a virtual news conference, adding that the stimulus package for this year...

public

Holger Hansen

Top and breaking news, pictures and videos from Reuters. For more breaking business news, follow @ReutersBiz.

reuters.com

Credible

Speculation

Anecdotal Evidence

Generalization

Stacking the Deck

Appeal to Authority

Straw Man

Slippery Slope

Emotional Appeal

Red Herring

False Dilemma

Illogical

Moral Equivalency

Ad Hominem

Correlation w/o Causation

Semantics

Begging the Question

Faulty Analogy

Non Sequitur

Bandwagon

Dogmatism

Failing Occam's Razor

Biased

Pure Opinion

Hit Piece

Racial Bias

National Bias

Religious Bias

Financial Incentive

Political Agenda

Gender Bias

Misused Image/Video

Study Misinterpreted

Mistake

Misused Term

Science Misrepresented

Factual Error

Satire

Surface Level

Lack of Reliable Sources

Sensational

Not Credible

Investigative

Balanced

Well Sourced

Great Context

sports

entertainment

U.S.

international

business

technology

science

culture

politics

media

health

Germany to double net borrowing for 2021 to fight pandemic impact

No article scores yet.

CRITIC REVIEWS

PUBLIC REVIEWS