BERLIN (Reuters) – German Finance Minister Olaf Scholz plans to tackle at the least 160 billion euros ($190 billion) in new debt in 2021 to assist stave off the financial affect of the COVID-19 pandemic, three folks aware of the matter mentioned on Sunday.
That is at the least 64 billion euros larger than the 96 billion euros initially foreseen by Scholz for subsequent yr.
Of the extra debt, 39.5 billion euros are earmarked to assist firms whose enterprise has been hit by the coronavirus disaster, a draft of the funds seen by Reuters confirmed. About 2.7 billion euros will probably be obtainable to pay for a vaccine.
Funds to pay for the overall affect of the pandemic have been raised by 10 billion euros to fifteen billion euros.
Parliament this yr suspended Germany’s debt brake to permit the federal government to tackle web new debt of as much as 218 billion euros to finance rescue and stimulus measures.
However a coalition supply mentioned it was unlikely to wish the total quantity. Scholz has mentioned he’ll ask lawmakers to droop debt limits once more subsequent yr.
The Finance Ministry was not instantly obtainable for remark.
Germany has taken unprecedented steps to assist firms and small companies to get by way of the disaster, liberating up billions of euros to forestall the financial system shrinking additional.
The federal government expects gross home product to contract by 5.5% in 2020, however to rebound by 4.4% in 2021.
Writing by Christoph Steitz; enhancing by Barbara Lewis