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Finance Minister Olaf Scholz (SPD) continues to inflate the federal budget in 2021: if he was planning new debt of 96 billion euros in September, it was 179.8 billion euros in December, and now he wants additional loans of up to 240 . Have 2 billion euros approved by the Bundestag - that is another 60.4 billion euros more than previously estimated.

The federal cabinet wants to get the necessary supplementary budget on the way on Wednesday.

And an end to the accumulation of debt is not yet in sight.

"We will also have to pull the exemption from the debt brake in 2022," says the Ministry of Finance.

These key points for the federal budget 2022 show: For the coming year, a further new debt of up to 81.5 billion euros has already been set.

That means: Including the 130 billion euros that the crisis already cost the previous year, the federal government is currently assuming pandemic costs of around 450 billion euros.

The reasons are high spending on vaccines, tests and corporate aid on the one hand and lower than expected tax revenues on the other.

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The federal government will thus incur significantly more debts within three years than in the 20 years since the turn of the millennium put together - i.e. within two decades in which the financial crisis also saw a huge economic slump, in which the federal government also provided companies with state aid programs and came to the rescue of their employees.

"We do not want to gloss over anything, the net borrowing is high, but still lower than feared," said the Ministry of Finance on the revised budget figures.

The pandemic and its consequences placed a heavy burden on this and the coming budget, but in the previous year, in the end, significantly less money was spent than initially taken into account - the net borrowing was ultimately 130.5 billion euros instead of 217.8 billion euros.

Source: WORLD infographic

Despite the crisis, Germany is well positioned financially, the country can afford it because provisions had been made well before the crisis, according to Scholz's ministry fearlessly.

The debt ratio - i.e. the ratio of debt to economic output - is expected to be 75 percent this year; after the financial crisis it was more than 80 percent.

Massive relief measures promised

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Apparently, the federal government is assuming that huge aid programs will be necessary, especially for the economy.

To the already planned 39.5 billion euros for corona corporate aid, another 25.5 billion euros are now to be added.

The reduced tax revenue due to the extended restrictions weighs 8.8 billion euros, and the Ministry of Health will receive an additional 8.7 billion euros for further measures to combat pandemics.

"We have already taken massive relief measures and will continue to do so," is the promise.

So that no further supplementary budget is necessary in the hot phase of the approaching federal election campaign, the government is apparently granting huge expenditure buffers.

This is shown very clearly by the Corona corporate aid point: In the first two months of the 65 billion euros that were now available, not even ten percent flowed out - according to the monthly report of the Ministry of Finance, it was 6.2 billion euros in January and February.

So for the remaining ten months there are still almost 60 billion euros left over.

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In addition, there is a reserve of 48 billion euros, which, contrary to what was initially planned, will not be touched in the coming year either.

The Ministry of Finance only wants to touch this iron reserve when the debt brake is re-activated and the annual new debt may only be around ten billion euros.

Scholz plans permanently with debt in 2021

Kassensturz in the Corona crisis: In the coming year, the federal government will have to take out significant loans from the finance minister's point of view.

Scholz does not want to save on important projects.

See the press conference from September 23rd here.

in full length.

Source: WORLD

After three years, in which unlimited additional debts may be accumulated due to an "extraordinary emergency situation", as it is called in the Basic Law as a justification, it should be over by 2023.

"From 2023 we want to comply with the debt rule again," it says in government circles.

Medium-term financial planning is geared towards this.

Until recently, however, this was also the case for the year 2022.

Now the 48 billion euro reserve should enable the return to the legally anchored debt path in 2023 and 2024.

Even with this reserve, however, it is not yet clear whether the return to an orderly budget will succeed without extraordinary tax increases or spending cuts.

There are still some gaps in the government's medium-term financial planning up to 2025.

Greens call for investments

The Federal Government's hope is that this gap will be closed by itself through positive economic development and, as a result, higher tax revenues than the tax estimates have so far forecast.

That's what Scholz relies on.

In the past few months he repeatedly pointed out that this had already been achieved after the financial crisis.

Back then, too, there were initially huge holes in financial planning, called “need for action” in the language of the housekeepers, which then dissolved due to the recovery of the economy until the budget was actually drawn up.

Criticism comes from the ranks of the opposition.

"It is right to apply the exception rule of the debt brake again for 2022 in order to take out necessary loans, but you also have to use this money sensibly," says Sven-Christian Kindler, budgetary spokesman for the Greens.

After the federal election, the key figures and the financial plan would have to be changed with new political majorities.

"The answer to the corona crisis and the economic slump must be an investment program, not an austerity policy," said Kindler.

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Unlike the Greens, the FDP is going too far with the additional debts.

The additional 140 billion euros this year and next is a lot of money that children and grandchildren will have to repay along with interest, says budget politician Otto Fricke.

These new debts are neither justified nor justified.

The FDP expects budget solidity from the federal government even in times of crisis.

The budget for 2022 will no longer be the problem of the current government.

It will be adopted by the cabinet under Chancellor Angela Merkel (CDU) in the summer.

But it will not be decided by the Bundestag until the beginning of 2022 - that depends on how long the coalition negotiations last.

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