The German government has finalised its 2020 budget with net new debt of below 150 billion euros ($181 billion), which is roughly a third less than the originally planned borrowing of nearly 218 billion euros, government sources told Reuters on Monday.
Berlin needed less debt because earmarked money for public investment did not flow into projects as quickly as expected, coronavirus aid was not tapped by as many firms as anticipated and the pandemic-related hit to tax revenues was smaller than projected, two officials told Reuters on condition of anonymity.
Nonetheless, new borrowing in 2020 was the highest in German history, easily surpassing the previous record of 44 billion euros in 2010, following the financial crisis.
Finance Minister Olaf Scholz is planning net new debt of up to 180 billion euros this year to continue rescue and stimulus measures and shield Europe’s largest economy from the impact of a potentially aggressive new wave of infections.
A finance ministry spokesman declined to comment.
The finance ministry is expected to present details of its final 2020 budget on Tuesday.
Main Photo: The flags of Europe and Germany are fluttering in the wind during a session of the German parliament ‘Bundestag’ in Berlin, Germany. EPA-EFE/HAYOUNG JEON