Germany’s Debt Spending May Become the New Normal, Official Says
Germany’s spending to counter the coronavirus crisis and modernize its economy means the country shouldn’t return to a balanced budget anytime soon, according to a senior Finance Ministry official.
The comments are an unusual admission by a government official that Germany’s debt-financed spending during the pandemic might reflect a new approach rather than just a temporary break from the tradition of balanced budgets, or a so-called black zero.
“A balanced budget isn’t obligatory,” Werner Gatzer, a deputy finance minister, said Monday in a speech in Berlin. “We should return to normality. But normality isn’t necessarily a black zero.”
Chancellor Angela Merkel’s government abandoned its balanced-budget policy this year and is set to borrow about 218 billion euros ($258 billion). A deficit of more than 80 billion euros is set for next year to fight the fallout from the pandemic, people familiar with the matter have said.
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