Germany may increase its new borrowing to 180 billion euros in 2021. The country is forced to sink into debt to finance the costs associated with the coronavirus pandemic. Bloomberg writes about it.
Finance Minister Olaf Scholz has repeatedly stated that years of budgetary discipline will help Europe’s main economy cope with the effects of the pandemic. However, in November he acknowledged that Germany would be forced to take out more loans next year.
The government has allocated 14 billion euros this month to help businesses such as restaurants and bars. Extending aid until December will cost another € 20 billion.
Germany’s economy grew in the third quarter of 2020 at a record 8.5 percent over the previous three months. In annual terms, GDP contracted by 4 percent. According to analysts, the country’s economy will decline by 5.4 percent in 2020, and will grow by 4.7 percent in 2021.