Germany plans to borrow extra $43 billion to cushion war blow

Germany plans to borrow extra $43 billion to cushion war blow

International News, Uncategorized















Bloomberg

Germany will increase borrowing plans by nearly 40 billion euros ($43 billion) this year to cushion the effect of the war in Ukraine, taking the total for net new debt to almost 140 billion euros, according to three people familiar with the matter.

The adjustment is needed to help finance a range of government measures designed to offset the economic impact of the war and surging energy prices on companies and consumers, said the people, speaking on condition of anonymity before the fiscal plan is presented to the cabinet on Wednesday.

The proposal by Finance Minister Christian Lindner will then be sent to parliament for

approval.

Since the start of the coronavirus pandemic, the German government has broken long-standing fiscal taboos and unleashed an unprecedented borrowing binge with net new debt of 130 billion euros in 2020 and a record 215 billion euros in 2021.

The ruling coalition has suspended constitutional rules limiting new debt for three consecutive years to deal with the economic fallout from the pandemic but is standing by a pledge to restore them in 2023 — at least for the time being.

Chancellor Olaf Scholz