Scholz Says Germany Should Re-Implement Debt Limits in 2022

(Bloomberg) -- Finance Minister Olaf Scholz said Germany should in two years time re-implement limits on the amount of new debt that the country can take on after borrowing huge sums to support the economy during the coronavirus pandemic.

“Of course it must be our perspective to have budgets from 2022 onward that meet the constitutional requirements for normal times,” Scholz, who is also the Social Democrats candidate to replace Angela Merkel as chancellor, said in an interview with the Rheinische Post published on Saturday.

In response to the crisis, Merkel’s government in March abandon its balanced-budget policy and temporarily suspended constitutional debt limits as part of the massive stimulus push. Some in Merkel’s financially conservative bloc want to reimpose the restrictions on new debt already in 2021.

However, Scholz told the German newspaper that the exceptional spending abilities must remain in place for the time being because “the crisis won’t be over before by the end of this year” and “if everything goes well, the worst will be behind us by end of next year.”

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