Germany to return to austerity after coronavirus crisis

Peter Altmaier
FILE PHOTO: German Economy Minister Peter Altmaier addresses the media during a joint news conference with Finance Minister Olaf Scholz (not pictured) to reveal details of a supplementary budget to counter the impact of the coronavirus disease (COVID-19) outbreak, in Berlin, Germany, March 23, 2020. Michael Sohn/Pool via REUTERS

The German government will return to its savings policy once the coronavirus crisis is over, Economy Minister Peter Altmaier told ZDF broadcaster on Tuesday, adding that Europe’s largest economy had committed to paying the debt back from 2023.

Germany on Monday agreed on a package worth up to 750 billion euros (699.07 billion pounds) to mitigate the damage of the coronavirus outbreak on Europe’s largest economy, with Berlin aiming to take on new debt for the first time since 2013.

“Once the crisis is over – and we hope this will be the case in several months – we will return to austerity policy and, as soon as possible, to the balanced budget policy,” he said.

Germany was taking the money out under favourable capital market conditions, added Altmaier.

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“The conditions are only so favourable because everyone believes in us and trusts that we will only do this as long as is necessary,” he said.

The government expects the pandemic to plunge the economy into recession. Finance Minister Olaf Scholz has said his latest budget plans are based on the assumption that gross domestic product will shrink by roughly 5% this year.

Germany has 27,436 confirmed coronavirus cases and 114 people have died, the Robert Koch Institute for infectious diseases said on Tuesday.

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