The German finance minister has kicked off days of debate over the 2021 budget, arguing for more debt to support the economy during the coronavirus pandemic. "It's a really, really" large sum, admitted Scholz.
If agreed by the Bundestag, the amount would be the second-highest sum of new debt ever in modern German history. Berlin set the record earlier this year when it allowed up to €217.8 billion in additional borrowing to help stem the economic effects of the health emergency.
The borrowing was only possible once the government lifted the so-called debt brake that limits the federal government's structural net borrowing to 0.35% of gross domestic product (GDP).
Despite this, most of the political parties represented in the Bundestag have already signaled their approval of the plan.
In total, the 2021 budget plan calls for spending of €413.4 billion, down from this year's exceptionally high €508.5 billion — a figure that was swollen by spending on rescue packages.
Can Germany take on that much debt?
Scholz said he was confident Germany could bear the debt. He drew a comparison with the 2009 financial crisis, saying that the debt ratio to economic output went up to around 80% then. During the health pandemic, the ratio would probably be at around 75 to 76%. "This is a good sign," said Scholz.