The Minister of Finance had previously asked them to approve the amending finance law which provides for 156 billion euros of additional expenditure financed by an increase in borrowings on the markets and to accept recourse to this constitutional provision which authorizes, in the event urgently, the government to circumvent budgetary rules.
“This is a considerable sum, almost half of our usual annual budget,” said Olaf Scholz.
“And since this amount is so high, the Bundestag must decide whether it agrees to exempt the government from compliance with the debt rule provided for in the Constitution in cases of exceptional emergency”, continued the minister, who was speaking on behalf of Chancellor Angela Merkel, still in quarantine.
“We need this money to fully overcome the social and economic impact of the crisis,” he told MEPs seated far from each other to limit the risk of contamination.
“We are living in a crisis unprecedented in the history of the Federal Republic. This crisis is colossal, totally different from the crises we have faced in the past.”
Worth a total of 750 billion euros, the government stimulus plan provides in particular for a budgetary extension of 156 billion euros and the allocation of 100 billion euros to a stability fund which may take direct stakes in enterprises.
In an interview with the financial daily Handelsblatt, the Minister of Justice, Christine Lambrecht, justified the latter hypothesis by the risk of seeing German companies butchered or sold.
“To this end, the state is ready to take stakes in companies, whether partially or fully, if it turns out to be necessary,” she said.
An envelope of 100 billion euros will also be granted to the public development bank KfW to finance loans to companies in difficulty and KfW will be authorized to borrow itself up to 200 billion.
Completely unusual in the modern history of Germany by the scale of the expenditure which it foresees, this plan appears as a lifeline for an economy which threatens to collapse.
In the press release accompanying his monthly survey on the business climate in Germany, Ifo economist Klaus Wohlrabe estimated between 5% and 20% the contraction of German GDP this year depending on the duration of the containment measures taken to fight against the coronavirus pandemic.
(Michael Nienaber; French version Nicolas Delame and Jean-Philippe Lefief, edited by Jean-Michel Bélot)