In a bid to provide assurance to businesses, Germany promised “unlimited” stimulus to companies hit by the coronavirus pandemic as a part of the help package worth at least 550 billion euros. In a televised address on March 13, Finance Minister Olaf Scholz tried to highlight the most important message from the government saying there is no upper limit to the credit offered by KfW, the state-owned development bank.
Scholz said the federal government will do everything possible to combat the crisis and steer the country well through this difficult time. He added that the country is very well positioned to master this crisis after Germany announced its biggest postwar help package.
Economy Minister Peter Altmaier promised that the federal government will not fail because of a lack of money or political will. Altmaier said that the announced package of 500 billion euros, which is bigger than the help offered during the global financial crisis of 2008, was just for “starters” and will “reload” if necessary.
German Chancellor Angela Merkel has already called the coronavirus crisis “more unusual” than the banking crisis since the evolving health challenge has not been answered by scientists and medicines. After meeting the leaders of Germany’s 16 states, Merkel reiterated that the public finances were secondary for the government at the time of a health crisis like coronavirus pandemic.
While Germany has a self-imposed policy of not taking a new debt, Mekel said that the debt brake rule provides for exceptions in extraordinary situations. The German Chancellor added that budget balance is not the government’s primary concern right now. She said that the first task is to save people’s lives and, secondly, to keep economic activity going.
Merkel had earlier assured that Berlin is open to scrapping the self-imposed zero-deficit rule to fight against the novel coronavirus outbreak. She did not rule out the suspension of the zero-deficit rule targeted at fiscal prudence and said that the administration will prioritise the virus crisis.