"Overcoming COVID-19... Germany Borrows 81 Trillion Won for Supplementary Budget"

This Year's Debt Financing Amount: 324 Trillion Won

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] Germany has finalized a supplementary budget plan to raise an additional 60.4 billion euros (approximately 81 trillion won) in debt to overcome the COVID-19 pandemic.

The German Bundestag approved and finalized the supplementary budget plan on the 23rd (local time), which raises an additional 60.4 billion euros in debt this year. As a result, the total amount Germany will raise through debt this year increases to 240.2 billion euros (approximately 324 trillion won), and total expenditures rise by 50 billion euros (approximately 67 trillion won) to reach 547.7 billion euros (approximately 738 trillion won).

The grand coalition consisting of the Christian Democratic Union (CDU) and Christian Social Union (CSU) alliance and the Social Democratic Party (SPD) supported the supplementary budget approval, while the Free Democratic Party (FDP), the Left Party, and the far-right Alternative for Germany (AfD) opposed it, and the Green Party abstained.

Olaf Scholz, Germany’s Vice Chancellor and Finance Minister, stated, "This supplementary budget contains substantial support for society as a whole," adding, "It is an essential cornerstone for overcoming the pandemic."

The supplementary budget includes financial support for companies hit by the pandemic, costs for health policies such as vaccine purchases, and child bonuses. Scholz also added that a revision of revenue is necessary.

Thanks to the supplementary budget, companies will continue to receive financial support in the second half of the year. The third round of COVID-19 damage support payments provided by the German government was limited until the end of June. Scholz said, "We will not suddenly cut off support; essential support will continue."

Criticism continued from the opposition parties in Germany. The FDP criticized the additional debt raising as "excessive," pointing out that "the government is excessively pumping the budget without proposing a single cost-cutting measure."

The German government expects to raise 81 billion euros (approximately 109 trillion won) in debt next year. The budget for next year is scheduled to be approved after the federal election on September 26.