German parliament to vote on extra budget to fund COVID-19 response

  • 4/23/2021
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BERLIN, April 22 (Reuters) - German lawmakers will vote on Friday on a proposed debt-financed 60 billion euro ($71 billion) supplementary budget to boost aid for businesses and the healthcare system during the pandemic, which would lift annual new borrowing to a record high. To get the extra funds approved, the government needs a two-thirds majority in parliament 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 Chancellor Angela Merkel’s conservative bloc and Scholz’s Social Democrats (SPD) their worst ever results by voters 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)

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