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Corona: national debt will grow less rapidly in 2020 than expected

2020-10-20T11:37:01.852Z


The German national debt is growing rapidly due to the corona crisis. According to new calculations by the Ministry of Finance, the increase in 2020 will not be as blatant as expected.


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Finance Minister Olaf Scholz

Photo: FABRIZIO BENSCH / REUTERS

Despite the high burdens in the corona crisis, Germany's debt will not increase as significantly as recently assumed.

This emerges from new calculations by the Federal Ministry of Finance: In a document available to the Reuters news agency, a debt level of 71 percent of economic output is forecast for 2020.

Due to the expected economic recovery, the national debt is likely to fall slightly to 70.25 percent in 2021.

In the EU, there is actually an upper limit of 60 percent, which many countries do not adhere to and, precisely because of the burdens in the pandemic, will not be able to achieve this in the foreseeable future.

Germany was almost 60 percent in 2019.

Due to the high budget deficit this year and the severe recession, the debt burden is now increasing significantly.

Federal Finance Minister Olaf Scholz (SPD) had recently named even higher values, often around 75 percent, sometimes even 80 percent.

The latter would have been roughly the same as after the global financial crisis more than ten years ago.

But now some of the corona aid is not flowing out or is not needed: "It is assumed that the possible volume of the economic stabilization fund will not be used in full," it says with a view to the debt level this year.

Scholz is an advocate of the black zero.

Due to the corona slump in the German economy, he had to say goodbye to this goal.

At around 96 million euros, the draft budget for 2021 provides for the second highest new debt in the Federal Republic of Germany.

Icon: The mirror

kim / Reuters

Source: spiegel

All business articles on 2020-10-20

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