Scholz on the supplementary budget: "Now we are spitting in the hands again. "
- On Wednesday, the Cabinet approved a second supplementary budget of 62.5 billion euros.
- The German government wants to boost the economy again.
- For it credits are to be brought in a height, which makes some dizzy.
This brings the new debt planned for the current year to 218.5 billion euros. The money will primarily be used to finance the economic stimulus package, which is intended to revive consumption and the economy in the coming months.
"Now we are giving Germany a huge boost for our future," said Finance Minister Olaf Scholz (SPD). "Now we are spitting in our hands again, we are increasing the gross national product" – that is the task we have now." The federal government is taking a lot of money in hand, "because doing nothing would exacerbate the crisis and would therefore be much more expensive".
This tour de force, he says, can be managed because the Federal Republic has previously reduced debts in good times.
The debt ratio will now rise from below 60 to around 77 percent, the vice chancellor said. At the same time, however, he pointed out that even before the pandemic, others had more debt in relation to economic output than Germany would have after the crisis. The debt is to be reduced again within 20 years, starting in 2023. However, the Bundestag still has to approve the additional loans.
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Parliament had already passed a first supplementary budget of 156 billion euros at the end of March to finance several aid packages – and also suspended the debt brake in the Basic Law for this purpose.
- Now, among other things, the value-added tax is to be temporarily reduced and a bonus paid for families with children.
- In addition, small and medium-sized companies that have experienced particularly large drops in sales due to the crisis can receive bridging aid totaling 25 billion euros.
- Federal and state governments also want to work together to compensate municipalities for trade tax shortfalls.
- The federal government will also assume significantly more of the costs of housing for jobseekers from the municipalities in the future.
The new draft budget also takes into account the latest tax estimate. In the meantime, the federal government assumes that around 40.5 billion euros less in taxes will come in because of the Corona crisis than was thought at the beginning of the year.
The scale of new borrowing becomes clear when compared with the financial crisis: In the record debt year of 2010, the federal government took out 44 billion euros in new loans. FDP housekeeper Otto Fricke considers the debt now planned to be unnecessarily high. Scholz is now taking out more loans and parking the money in the budget so that he won’t need new debt in the 2021 election campaign year, he criticized. "These are the sleight of hand of a finance minister who would like to move to the Chancellor’s Office."
Left-wing parliamentary group deputy Fabio De Masi, on the other hand, advocated "massive spending by the state". However, repayment must be spread over 50 years so as not to "take too much air out of the economy with a strict diet.