Germany Sticks to Debt-Free Budget
Germany will maintain its disciplined approach to spending as lawmakers look set to confirm the government’s balanced budget for 2020, despite calls for fiscal stimulus to boost the country’s slowing economy.
After all-night discussions, the budget committee of the lower house of parliament signed off on plans to spend 362 billion euros ($399 billion) next year, a slight increase from the proposed 360 billion euros, according to documents from the committee. The bill will go to the floor of the legislature in the week starting Nov. 25.
“It remains: no new debt,” Eckhardt Rehberg, the budget expert for Chancellor Angela Merkel’s CDU party, said in an emailed statement on Friday. “Germany has no financing problem. We have the necessary income to finance the right priorities: climate protection, internal and external security, education and research, and social security.”
While Germany dodged a technical recession in the third quarter by eeking out an unexpected 0.1% expansion, growth remains anemic. The country has determinedly rejected calls to boost spending even though negative interest rates provide an incentive to raise debt.
At a Bloomberg News event in Berlin on Thursday, Finance Minister Olaf Scholz said Germany would be prepared to carry out “timely and targeted” measures, such as expanding support for unemployed people, in the event of a crisis -- but there isn’t one.
Separately, Der Spiegel magazine reported Friday that the federal government’s budget surplus will be just less than 10 billion euros this year, boosted by stronger-than-expected tax revenue and favorable interest rates. The magazine cited preliminary finance ministry estimates. A ministry spokeswoman declined to comment.
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