Germany Plans To Borrow Almost 180 Billion Euros Next Year

Germany Plans To Borrow Almost 180 Billion Euros Next Year

Germany plans to borrow almost 180 billion euros next year. This is almost double the amount of money the government had anticipated two months ago. The reason is the extension of measures to support the economy after the country was hit by a second wave of a new coronavirus pandemic. After a full-day debate, the German parliament's budget committee approved a plan, under which Germany would borrow 179.82 billion euros in 2021. At the end of September, Finance Minister Olaf Scholz announced his plan to borrow about 96 billion euros. According to German MEPs, this is the second highest amount in Germany's post-war history. "Increasing the volume is the right decision," Green MEP Sven-Christian Kindler told Reuters, saying it was not appropriate to save in the current crisis. The German government has decided to provide unprecedented support to businesses and households to help the economy cope with the crisis caused by the new coronavirus pandemic. In order to release billions of euros in support, parliament suspended the debt brake so that the government could borrow up to 218 billion euros to finance rescue measures and economic incentives. However, sources from the governing coalition said that the entire amount would probably not be needed. The government expects the German economy to decline by 5.9% this year after adjusting for calendar effects. In 2021, it expects growth of 4.4%.