© Reuters. FILE PHOTO: German Finance Minister Scholz and Justice Minister Lambrecht maintain information convention in Berlin

By Holger Hansen

BERLIN (Reuters) – German Finance Minister Olaf Scholz plans to tackle at the very least 160 billion euros ($190 billion) in new debt in 2021 to assist stave off the financial impression of the COVID-19 pandemic, three individuals conversant in the matter mentioned on Sunday.

That is at the very least 64 billion euros increased than the 96 billion euros initially foreseen by Scholz for subsequent yr.

Of the extra debt, 39.5 billion euros are earmarked to help corporations whose enterprise has been hit by the coronavirus disaster, a draft of the price range seen by Reuters confirmed. About 2.7 billion euros shall be accessible to pay for a vaccine.

Funds to pay for the overall impression of the pandemic have been raised by 10 billion euros to fifteen billion euros.

Parliament this yr suspended Germany’s debt brake to permit the federal government to tackle internet new debt of as much as 218 billion euros to finance rescue and stimulus measures.

However a coalition supply mentioned it was unlikely to want the total quantity. Scholz has mentioned he’ll ask lawmakers to droop debt limits once more subsequent yr.

The Finance Ministry was not instantly accessible for remark.

Germany has taken unprecedented steps to assist corporations and small companies to get by way of the disaster, liberating up billions of euros to stop the economic system shrinking additional.

The federal government expects gross home product to contract by 5.5% in 2020, however to rebound by 4.4% in 2021.

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