Germany plans another $83b in debt spending for this year

Bloomberg

Germany is mulling around 70 billion euros ($83 billion) in extra debt spending this year to fight the fallout from the coronavirus crisis, according to a person familiar with the plans.
Finance Minister Olaf Scholz needs those additional funds because the country’s lockdown is dragging on much longer than expected, the person said, cautioning that the exact number is still under discussion. Germany’s total new debt for this year will rise to 250 billion euros, Der Spiegel said, which reported the new spending plans earlier.
Scholz said earlier this month that Germany will have to increase debt spending in 2021 to help tackle the impact of the coronavirus crisis on Europe’s largest economy. “We will do extra activities yes, this is true, and we are able to do so,” he said in an interview with Bloomberg TV in early March.
Bloomberg reported last month that Chancellor Angela Merkel’s government is weighing as much as 50 billion euros in additional debt spending for 2021.
Germany has since extended its costly lockdown restrictions further amid stubbornly high numbers of virus infections. Another prolongation of the curbs — due to expire on March 28 — is seen as likely.
Health Minister Jens Spahn warned that Germany already is in a “third wave of the pandemic” after the contagion rate inched closer to a critical threshold.
Merkel and regional state leaders are due to meet on Monday to decide on the next steps in the fight against the coronavirus. Current curbs include billions of aid to companies such as restaurants, hotels and non-essential shops that were forced to close.
Germany also plans new debt of up to 80 billion euros for next year, Spiegel writes. Scholz, who is running for chancellor for the Social Democrats, plans to suspend constitutional borrowing limits in 2022 for a third straight year, people familiar with his thinking told Bloomberg last month. The 2022 budget will be decided by the next parliament after the national election in September.
Merkel’s cabinet is due to approve the spending plans on Wednesday. A finance ministry spokesperson declined to comment on the additional debt numbers.