Germany May Hike New Borrowing to About 180 Billion Euros in 2021
(Bloomberg) -- German federal government borrowing could rise to around 180 billion euros ($214 billion) next year to help fund spending to offset the impact of the coronavirus pandemic.
The new debt figure -- which compares with an originally planned amount of 96 billion euros -- is under negotiation among lawmakers in the Bundestag budget committee, according to a source familiar with the talks who asked not to be identified. The extra cash is needed to help fund aid for businesses hurt by restrictions to rein in the disease, which have been extended to Dec. 20.
Lawmakers are putting the final touches to the 2021 finance plan in a meeting expected to last into the early hours of Friday morning and the numbers could still change. A finance ministry spokesman declined to comment. The debt figure was first reported by the Handelsblatt and Sueddeutsche Zeitung newspapers.
Finance Minister Olaf Scholz has repeatedly pledged that the government will spend freely to help limit the impact of the pandemic on Europe’s biggest economy, and said that years of budget discipline have put Germany in a strong position to cope with the fallout.
He acknowledged at the weekend that Germany will have to borrow more next year, while indicating that new debt this year will ultimately not be as high as the budgeted amount of 218 billion euros.
This month, businesses such as restaurants and bars can get 75% of their previous year’s revenue in compensation, which will cost the government around 14 billion euros. Extending the aid into next month, as Merkel agreed with the 16 state premiers on Wednesday, will cost as much as 20 billion euros.
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