Berlin (Reuters) – Finance Minister Olaf Scholz defended the new debt of almost 180 billion euros planned for 2021 in the Bundestag at the beginning of the budget week.
Thanks to the use of massive financial resources, Germany has come through the coronavirus crisis better economically and socially than many initially expected, said the SPD chancellor candidate on Tuesday in Berlin. He does not see the repayment of the current debts as a danger. “We will grow out of the crisis.” This could succeed again, as it did after the global financial crisis more than ten years ago. Investing in future fields is particularly important.
With the debate on the budget of the Ministry of Finance, the Bundestag began its deliberations on the draft budget for 2021. This provides for expenditure of almost 500 billion euros and is to be passed on Friday – with the second highest new debt in the history of the Federal Republic. To this end, the Bundestag should again suspend the debt brake in the Basic Law by a majority of the Chancellors in the afternoon.
As expected, criticism came from the opposition. “Debt is a sweet poison,” said Christian Dürr of the FDP. So the present burdens would be passed on to future generations, which is unacceptable. The AfD considers the government’s corona policy to be “completely disproportionate,” and economic structures would be destroyed by the restrictions. The lockdown must end quickly, 2021 will also bring tens of thousands of bankruptcies. The left particularly criticized the defense budget. “Arms spending has exploded in recent years,” said Gesine Lötzsch. The money would be better invested in education, climate protection and housing.
The Greens announced that they would abstain from voting on the deviation from the debt brake anchored in the Basic Law. Budget politician Sven-Christian Kindler referred above all to the short repayment periods for the repayment of the corona debts. “The state is currently making money by taking out loans.” The negative interest rates would have to be used, especially since Germany has a relatively low debt ratio internationally. The help for the economy can be afforded. In addition, the Greens want additional investments of 50 billion euros per year by 2030. “After Corona the red pencil must not be used.”
The industrial nations organization OECD advises the federal government against returning to strict budget discipline too early after the corona recession. “Immediately reintroducing a strict deficit limit under the debt brake could jeopardize the recovery.” In the event of a weak economic recovery, additional support measures should even be taken. Fiscal impulses are only likely to be withdrawn gradually if the economic recovery “has really got underway”.