Draft budget of the federal government Cabinet approves of high New debt

Status: 23.06.2021 12:18 p.m.

The federal government will also take on massive debts in the coming year. The cabinet approved the draft budget, which provides for new borrowing of almost 100 billion euros for 2022. The debt brake will be suspended again for this. The federal cabinet has approved the government draft for the federal budget for 2022. Once again, the approved budget is shaped by the consequences of the Corona crisis. According to the draft, the federal government wants to incur more new debts in the coming year than previously planned. A net borrowing of 99.7 billion euros is planned, as can be seen from a cabinet proposal. The high level of new borrowing is justified with additional spending as a result of the corona pandemic, for example for corporate aid and to stabilize social contributions.

Debts grow to 470 billion euros

In the benchmarks presented in March, the Ministry of Finance had expected a net borrowing of 81.5 billion euros for 2022. Tax revenues remain below pre-crisis levels. This would mean that the mountain of debt accumulated by the corona pandemic between 2020 and 2022 would grow to around 470 billion euros. However, there are now plans to increase spending on climate protection and health, for example. The federal government had already taken on billions in new debts in 2020 and 2021. The budget plans are, so to speak, subject to change, because the new Bundestag elected in autumn has to pass the budget. There could therefore still be significant changes.

06/17/2021

Pandemic Management The federal government is apparently planning higher New debt

The new debt in the upcoming budget is apparently higher than originally planned.

Debt brake suspended again

According to the draft, the debt brake anchored in the Basic Law will also be suspended in the coming year against the background of the Corona crisis. It stipulates that the federal government may only take out new loans to a very small extent – a maximum of 0.35 percent of economic output. According to the draft, the federal government no longer wants to make use of the exemption from 2023. In the afternoon, Federal Finance Minister Olaf Scholz wants to present his budget plan