The Chancellor has warned of a shift in economic power due to the pandemic. The still high number of infections and deaths worries her.
In the general debate, Chancellor Angela Merkel justified the high level of new debt in the budget with the current challenge posed by the coronavirus: “We are living in a pandemic, we are therefore in an exceptional situation,” she said. Because of the high costs of coping with the pandemic, the debt brake anchored in the Basic Law is to be overridden for the second time.
“We have to do something to ensure that we take special action in this particular situation, and this is what this budget expresses,” said Merkel. Germany is an economically strong, democratic country with social cohesion and robust civil society. It is essential to maintain this strength. But it also showed: “The economy is resilient where the pandemic is under control.” To reconcile the two is the big task, said Merkel. The federal budget creates the right conditions.
“The money is there, and now it has to be used”. The Chancellor said that planning alone does not result in economic growth, but only if the money is used. She pointed out that the pandemic could reorganize the balance of power economically. According to forecasts, the Chinese economy will grow this year, while the economies in the USA and Germany will shrink. The economic slump in Germany is less than in Great Britain or France, for example.