Germany’s New Finance Chief Triggers €60 Billion Budget Boost
Germany’s New Finance Chief Triggers €60 Billion Budget Boost
(Bloomberg) -- Germany’s new finance minister, Christian Lindner, is moving swiftly ahead with a supplementary budget which he said will help lift Europe’s biggest economy out of its pandemic-induced slump.
Lindner, who took office on Wednesday, said the updated 2021 budget plan will be on the new cabinet’s agenda on Monday. It channels 60 billion euros ($68 billion) earmarked in this year’s budget into an investment fund to help finance the administration’s climate goals in coming years.
“We’re still not able to operate as normal in terms of finance policy, and remain in an emergency situation due to the pandemic,” Lindner said at a news conference in Berlin.
Under the previous government, Germany suspended its constitutional borrowing restrictions and spent freely to deal with the fallout from Covid-19.
The new ruling coalition led by Social Democratic Chancellor Olaf Scholz is also pursuing an ambitious agenda that aims to address climate change and update Germany’s digital infrastructure.
Lindner said that this year’s planned net borrowing of 240 billion euros won’t be exceeded, and reinforced the new administration’s commitment to restoring the debt limit from 2023.
The chairman of Germany’s pro-business Free Democrats was speaking after a meeting of Germany’s Stability Council, a joint federal and regional body charged with safeguarding budget sustainability.
The council issued a statement in which it said it expected Germany’s public-sector deficit to narrow to 0.5% of gross domestic product in 2024, putting it back in line with a medium-term European Union target. It then expects a surplus of about 0.5% of GDP in 2025.
©2021 Bloomberg L.P.