New debt burden in the billions for Ukraine: "We'll get by," Scholz assures of people's fears
Created: 05/17/2022, 16:24
By: Magdalena von Zumbusch
Chancellor Olaf Scholz (SPD) thinks that Germany will be able to cope with the new debt for Ukraine aid.
(Archive image) © Michael Kappeler/dpa
Corona caused Germany's debt to grow drastically, and the Ukraine war further increased the debt burden.
Is Germany overwhelmed?
Cologne – Exactly when the corona crisis was about to flatten out, Russian President Vladimir Putin decided on a war of aggression that was least expected - and thus also shook the German economy.
Chancellor Olaf Scholz (SPD) rejected concerns about the high national debt as a result of the corona pandemic and the Ukraine war in the “RTL Direkt” program “Am Tisch mit Olaf Scholz” on Monday
(May 16)
as unjustified.
War in Ukraine causes debt: "We will be able to cope with the debt burden," says Chancellor Scholz
Since the Russian attack on Ukraine, the federal government has had to mobilize large sums of money: relief packages worth billions and tax cuts because of the exploding energy prices, support for companies and humanitarian aid.
At the end of April, the Ministry of Finance spoke of new debts of 39.2 billion euros, and this is probably only an interim figure.
Overall, the German debt burden at the end of April was 138.9 billion euros.
“We will manage our debt burden.
We have proven that,” said the SPD politician on Monday evening
(May 16)
on the “RTL Direkt” program.
He referred to the high borrowing during the financial crisis of 2008/2009, where this was also successful.
Among the G7 members, Germany was the model country for crisis management, having less public debt at the end of the crisis than before.
Video: Because of the Ukraine war - Germany wants to take on 40 billion euros in additional debt
Ukraine debt: Scholz wants to comply with the debt brake again from 2023 - but reduction is years away
If the Ukraine crisis hadn't happened, it would have been possible to bring the debt level back to the pre-crisis level, according to Scholz.
It will now take a few more years.
"But we will succeed." The Chancellor emphasized that the government wants to comply with the debt brake of the Basic Law again from 2023.
This goal was announced by Finance Minister Christian Lindner at the beginning of the year and is apparently to be adhered to, also against the background of the Ukraine war.
Is Finance Minister Lindner counting on the performance of German taxpayers?
The tax estimators of the Federal Ministry of Finance assume that the federal, state and local governments will take in even 40.4 billion euros more this year than expected in November 2021.
But: The Ministry's working group on tax estimates only takes into account reforms that have already passed the Bundestag and Bundesrat.
Large parts of the planned relief packages due to high energy costs are currently still going through the parliamentary process.
In addition, a possible plus could shrink very quickly if the supply chain problems caused by the corona lockdowns in China worsen.
Or if the Ukraine war leaves such a clear mark on the German economy, as some economists fear.
How the new debt will be reduced remains unclear.
Debt burden: Scholz wants to be wary of escalation - but also: "Make brave decisions"
But Chancellor Scholz apparently considered Ukraine's support to be important enough to wave the large additional expenditures through.
On the Russian war of aggression in Ukraine, Scholz also expressly commented on RTL Direkt: "We have to worry that the war will escalate, but that shouldn't paralyze us." The government must "be able to make reasonable, to make very conscious and also very courageous decisions”.
The goal remains that Russia does not win the war, said the Chancellor.
But the goals would not go beyond that - "that would be a completely wrong aim given the fact that it is a nuclear power".
Scholz again called on Russia for a ceasefire and the withdrawal of its troops, as well as negotiations with Ukraine.
(
mvz with dpa
)