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“The previous level of support cannot be continued indefinitely”
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€ 180 billion in new debt, but who should pay it?
The grand coalition wants to take on nearly € 180 billion in new debt, among other things to relieve those affected by the Crown crisis. But who should pay for all this?
The state assumes 180,000 million euros in new debt in the crisis of the crown. Chancellor Merkel believes that this cannot last forever. And before budget deliberations in the Bundestag, remember financial responsibility, including states.
AIn view of the high costs of Corona’s financial aid, Chancellor Angela Merkel (CDU) has campaigned for close cooperation between federal, state and local governments. Since the previous level of support for businesses cannot continue indefinitely, everyone has a great responsibility, Merkel said on her weekly podcast on Saturday. “The federal government, states and municipalities must work together well and constructively to tame the pandemic and its consequences in the best possible way,” Merkel said, referring to the budget challenges of the coming years.
The grand coalition wants to take on nearly € 180 billion in new debt next year and re-suspend the debt brake in the Basic Law. Merkel defended the new debt. Since the beginning of the pandemic, the goal has been to mobilize “the financial force” to counter this. “The costs would be even higher, financially and socially, if many companies collapsed and millions of jobs were lost.” The federal government could also invest large sums in 2021 because the budget was good in recent years.
The objective of the November and December aid and the Bridge III aid, which will be applied from January, is, in addition to supporting all those who have little or no income due to the necessary closures, to keep the German economy in a good starting position to grow back successfully quickly if the pandemic is under control.
The Bundestag wants to debate the new budget from Tuesday. More than a third of what is expected to be the last budget of the current grand coalition will be financed with debt. Expenditures of almost half a billion euros and loans almost double are expected. Many citizens can expect tax cuts, too. The Left speaks of the “most expensive campaign budget in the history of the Federal Republic.” In autumn of next year a new parliament will be elected.
The federal government bears the financial burden
There are mounting tensions between the federal and state governments over how to finance the costs of the crown crisis. “The federal states stand by as the spectators and do not pay a penny,” said the budget spokesman for the Union parliamentary group, Eckhardt Rehberg, in Berlin at the end of November. So now you have to “talk seriously about who carries what loads.”
Rehberg relied on figures from the Federal Statistical Office and the Federal Ministry of Finance. According to the Ministry of Finance, the federal government had expenditures of 334 billion euros up to and including October and the federal states of 376 billion euros. According to Rehberg, the federal deficit was around 89,000 million euros and that of the federal states was 32,000 million. This shows that the federal government bears the greatest burden. Furthermore, the net debt target for all countries is only one-third depleted, at a good 32 billion euros compared to a current-year target of a good 94 billion euros.
