Cabinet approves supplementary budget “full steam ahead out of the crisis

Photo: Olaf Scholz

The German Cabinet has approved a second supplementary budget so that the economic stimulus package can be implemented quickly and decisively. The goal is to give the economy a strong boost and thus secure jobs. "This is a powerful package that we now want to use to get out of the crisis," said Vice Chancellor and Finance Minister Olaf Scholz.

"Our fiscal policy was, is and will remain responsible," the finance minister stressed. "With the economic stimulus package we are doing everything we can to emerge from the crisis with full force now." For this, the federal government "takes a lot of money in hand, because doing nothing would exacerbate the crisis and would therefore be much more expensive."

In order to meet the enormous challenges posed by the pandemic, further borrowing of around 62.5 billion euros is necessary compared with the first supplementary budget. In total, the federal government is borrowing 218.5 billion euros this year. They are to be reduced again within 20 years starting in 2023.

A huge boost for our future

"We can handle this tour de force because we have reduced debt in good times and are in a good financial position," said Scholz. He pointed out that thanks to responsible fiscal policy and the reduction of the debt-to-GDP ratio to below 60% in 2019, Germany has the necessary financial strength to respond decisively. Now Germany gets a huge boost for its future. "’Now we’re spitting in our hands again, we’re increasing the gross national product’ – that’s the task we now have to."

The social-democratic economic stimulus package: with a "bang

130 billion euros from the federal and state governments to kick-start the economy. 120 billion of this will come from the federal government alone. And the money is well invested. Because it’s a social democratic stimulus package with "oomph". The priorities: Securing jobs and apprenticeships, strengthening purchasing power for everyone with medium and small incomes and especially for families, providing strong support for municipalities, and making strong investments in a modern country.

Jobs, social security, purchasing power.

Secure targeted bridging assistance for particularly hard-hit sectors Jobs, a Protective shield for apprenticeships Gives young people prospects. And that social safety net will be tightened even more so that no one slips through the net. The Value Added Tax is lowered, reduce electricity costs and for families there is an 300-euro child bonus. Single parent are additionally supported. It all gives people security – and extra money to spend. This is also good for Economic stimulus.

Healthy, strong communities.

Federal and state governments equalize shortfalls in trade tax 12 billion euros in cities and municipalities. And: the federal government is assuming an even larger share for the Costs of accommodation in the basic income support. That’s an additional 4 billion euros every year. Permanent. This will enable local authorities in Quality of life invest locally – and a hefty economic stimulus give.

Investing in a modern country.

We support Electromobility, future investments manufacturers and suppliers are being promoted and the network of the Charging columns will be expanded rapidly. And we drive the Hydrogen technology ahead, build the Renewable energies further and support municipalities in energetic building renovation. Also: additional Money for schools, daycare centers, research and for the Digitizing of economy and management.

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