German lawmakers approve debt-fuelled extra budget to fight COVID-19


Releads with vote

BERLIN, April 22 (Reuters) - German lawmakers approved a debt-financed 60 billion euro ($71 billion) supplementary budget on Friday to boost aid for businesses and healthcare during the pandemic, which would lift annual new borrowing to a record high.

The government of Chancellor Angela Merkel's conservatives and their Social Democrat (SPD) coalition partners had the two-thirds majority in parliament needed to temporarily suspend constitutionally enshrined limits on borrowing.

The plan will translate into net borrowing this year rising to just over 240 billion euros.

Finance Minister Olaf Scholz defended the plans in a speech and repeated his pledge to cushion the economy during a third wave of the coronavirus with generous fiscal support.

"We will keep this up until the end," said Scholz. "Because after the pandemic we want a full speed (recovery)."

Germans vote in a September election forecast to deliver Merkel's conservative bloc and Scholz's Social Democrats (SPD) their worst ever results.

Polls suggest voters have grown increasingly frustrated with often chaotic lockdowns and a slow start to a vaccination campaign that has been gaining pace in recent weeks.

Some 25.5 billion euros of the additional debt will go to extending financial lifelines to businesses affected by lockdowns and almost 15 billion euros will be assigned to hospitals and vaccinations.

The overall budget for this year will rise to some 548 billion euros, with more than 40% financed through debt.

(Reporting by Holger Hansen Writing by Joseph Nasr Editing by Raissa Kasolowsky and Andrew Heavens)

((; +49-30-2201-33711 ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.