Germany intends to increase its 2021 borrowing to about $215 billion to address the coronavirus pandemic and send emergency assistance for businesses as case numbers continue to rise.
Finance Minister Olaf Scholz announced Friday that the country would almost double its planned borrowing for next year to the second-largest amount of net new borrowing in post-war Germany, Reuters reported. In September, Scholz envisioned the nation would borrow almost $115 billion for 2021.
“Our goal is to overcome this pandemic and grow out of it with full strength next year,” Scholz said during the press briefing.
Scholz cited that the 2020 and 2021 stimulus packages would lead to a debt of more than $358 billion, saying, “We know that these are exceptional budgets in 2020 and 2021.” He said the budget designated for financial support will be extended to June 2021, according to Reuters.
Germany’s constitution typically prevents the country from adding new debt through capping the federal budget deficit to 0.35 percent of the output, but Parliament halted the rule because of the pandemic.
Economy Minister Peter Altmaier said during the press conference he did not think any coronavirus restrictions would cause a “major wave” of businesses being unable to pay debts, as they have other resources to use.
“I believe that for the sectors primarily concerned … we have — through the November and December aid — created a possibility for the economic consequences to remain within manageable limits,” he said, according to Reuters.
The country plans to increase and extend a partial coronavirus lockdown that has shut down bars, restaurants and entertainment venues until at least Dec. 20. But Chancellor Angela Merkel has indicated the lockdowns may continue into early next year if coronavirus cases don’t decrease.
Germany has confirmed more than 1 million COVID-19 cases and 15,664 deaths since the beginning of the pandemic, according to data from Johns Hopkins University.