The additional costs are mainly caused by the new shutdown in Germany, which is linked to massive aid for the economy. The partial lockdown, initially scheduled until the end of November, will most likely be extended – and with it the aid. Specifically, Finance Minister Scholz is planning a further 40 billion euros for entrepreneurs who are affected.
Billions more for vaccines, hospitals and protective masks
- Around 2.7 billion euros are earmarked for the procurement of vaccines.
- The extension of the compensation payments to hospitals are planned to be 2 billion euros and the discounted handover of protective masks will cost 2.5 billion euros.
The Federal Government will decide on Wednesday (November 25) with the Prime Ministers of the federal states about the extension of the Corona bridging aid beyond November 2020. Overall, Scholz plans to spend more than 480 billion euros in the coming year.
Debt brake remains suspended
In the coming year, the debt brake anchored in the Basic Law is to be suspended, the Ministry of Finance had previously said. From Brussels there are no objections – on the contrary: the budget planning corresponds overall to the EU goals jointly formulated in the summer, said the Brussels authority on Wednesday in its economic policy analysis, which was customary in autumn.
The measures earmarked in the federal budget largely served to prop up the economy in a time of great uncertainty, the commission judged. She only asked the federal government to regularly check whether the crisis measures are effective and appropriate.
EU Commission recommends economic aid
The EU Commission regularly reviews the member states’ budget drafts in autumn and makes economic policy recommendations. This process, known as the “European semester”, is intended to lead to a more uniform economic policy, especially in the euro zone. Because of the pandemic, the usual deficit and debt rules do not currently apply.
The EU Commission expressly recommends that states continue to spend and invest money to support the economy in the fight against the crisis. However, it does raise concerns about some large economies. She criticizes the fact that some measures planned in the French budget are not limited in time or are offset with savings elsewhere. France must pay attention to the medium-term stability of its finances. The Commission expressed similar concerns about the level of indebtedness in Italy and Spain.