BERLIN (AP) – The German cabinet on Wednesday approved the 2022 budget. Budget plans to suspend new debt repayment rules for the third year in a row as the government seeks to help Europe’s largest economy recover from the coronavirus epidemic.
The government plans to spend 419.8 billion euros ($ 499 billion) next year, up from 547.7 billion euros this year. The plans of the Minister of Finance Olaf Scholz envisage a new loan of 81.5 billion euros in 2022, against 240.2 billion euros this year.
Scholz said Germany was “opening the way for growth with record investments in climate protection and digitalisation.”
“The numbers show that our aid policy is working,” he said of the support packages that have been put in place to help businesses struggling to make ends meet.
Six years later, Germany applied for new debt repayment in 2020 to help cover the costs of support, stimulus packages, and expected tax revenue shortfalls.
The country’s so-called debt brake has been lifted to allow new loans of up to 217.8 billion euros last year. In the end, Germany borrowed only 130.5 billion euros. The economy suffered less than expected, falling by 4.9%, which is still a better result than in a number of other European countries.
The “debt brake” introduced a decade ago allows for new borrowing at just 0.35% of annual gross domestic product, although it can be suspended to combat natural disasters or other emergencies beyond the control of the state.