FILE PHOTO: German Finance Minister Olaf Scholz attends a joint news conference with Justice Minister Christine Lambrecht in Berlin, Germany, October 7, 2020. REUTERS/Hannibal Hanschke
November 22, 2020
By Holger Hansen
BERLIN (Reuters) – German Finance Minister Olaf Scholz plans to take on at least 160 billion euros ($190 billion) in new debt in 2021 to help stave off the economic impact of the coronavirus pandemic, three people familiar with the matter said on Sunday.
This is at least 64 billion euros higher than the 96 billion euros initially eyed by Scholz for next year.
Parliament has suspended Germany’s debt brake to allow the government to take on net new debt of up to 218 billion euros to finance rescue and stimulus measures.
But a coalition source said it was unlikely to need the full amount. Scholz has said he will ask lawmakers to suspend debt limits again next year.
The Finance Ministry was not immediately available for comment.
Germany has taken unprecedented steps to help companies and small businesses get through the crisis, freeing up billions of euros to prevent the economy shrinking further.
The government expects gross domestic product to contract by 5.5% in 2020, but to rebound by 4.4% in 2021.
(Writing by Christoph Steitz; Editing by Kevin Liffey)