Berlin (AFP)

Germany will borrow a record amount in 2021 to cope with the economic consequences of the Covid-19 pandemic in the country, facing a third wave of infections, according to the amending budget approved by the government on Wednesday

The amendments presented to the Council of Ministers bring the amount of new loans to 240.2 billion euros, a third more than the amount initially adopted by Parliament last December.

"We are putting the necessary means to face the economic and financial consequences of the pandemic", justified the Minister of Finance Olaf Scholz Wednesday.

After a decade of accumulating budget surpluses, Germany contracted 370 billion euros in new debt between 2020 and 2021, due to the pandemic.

And spending should continue in 2022: Berlin wants to borrow 81.5 billion euros more next year.

The country will thus derogate for the third consecutive year from its constitutional budgetary austerity rules, which prohibit it from borrowing more than 0.35% of its GDP each year.

"All this is expensive, but to do nothing would have been even more expensive", justified Olaf Scholz at a press conference Wednesday.

When questioned by members of the Bundestag (lower house of parliament), Chancellor Angela Merkel, for her part, defended a "measured and balanced" budget, in the face of "uncertainties".

The German executive intends to return to compliance with this "debt brake" from 2023, with 8.3 billion euros in loans planned.

-Long aid-

Faced with the worsening health situation, Berlin has extended until at least April 18 its restrictive measures against the virus, which are straining its finances.

Much of the country's stores have been closed since December, as have bars, restaurants, cafes, and entertainment venues since November.

These measures should lead to a fall in the GDP of the largest European economy in the first quarter of 2021, according to the Bundesbank.

They arouse the anger of the economic circles, more and more virulent against the health policy of the government.

"There is growing concern that we are suffering lasting and irreparable damage throughout the economy," said the powerful industry lobby BDI.

The organizations of traders fear for their part the closure of "120,000" stores because of the extension of the restrictions.

The crisis has already cost 250 billion euros to the German economy, according to a study by the IW economic institute in Cologne published on Wednesday.

To respond to impatience, the Minister of the Economy Peter Altmaier on Tuesday promised "additional aid" for the most affected sectors, of which he must unveil details in the coming days.

"We will continue the aid as long as necessary," for his part assured Olaf Scholz on Wednesday.

Since the start of the crisis, Berlin has paid more than 114 billion euros in support to its businesses, in the form of short-time working, guaranteed loans and direct aid.

© 2021 AFP