ECONOMY
Wed 15 Mar 2023 8:51 pm - Jerusalem Time
Germany can approve a new package of aid in the face of inflation
Berlin - (AFP) - German Finance Minister Christian Lindner said Friday that Germany can finance a new package of aid worth billions of euros in the face of inflation without abandoning the "indebtedness curb".
On August 11, German Chancellor Olaf Scholz promised to provide a new aid package to individuals in the face of rising prices in the energy and food sectors, which is expected to be agreed this fall. But he reaffirmed his commitment to return to budgetary discipline next year, keeping the deficit at 0.35 percent of GDP.
Asked by the Rheinische Post about the size of this potential aid, the finance minister said that "a small, double-digit number of billions of euros is possible".
He added that this new package of support measures is intended for low- and middle-income families and will include "measures directed at companies that consume a large amount of energy."
Inflation in Germany was 7.5 percent in July, slightly lower than the 7.6 percent recorded in June.
But Economics Minister Robert Habeck said that the autumn and winter seasons are expected to be tough in Europe's largest economy because of the "next in the economy" energy crisis.
Germans will face higher heating and electricity bills in the fall, with the government's decision to allow higher energy prices to be felt by the end consumer.
Schultz did not specify when and how much the aid package would cost. But he reaffirmed his commitment to respecting the constitutional rules of budgetary discipline again in 2023 after three years of exception in the face of the COVID-19 pandemic.
"We expect to be able to implement our projects within the financial framework available so far," the German chancellor said.
Voices, particularly within the government-aligned Greens and the Social Democrats, called for an extension of the "debt brake" suspension in the event of a sharp deterioration in the German economy.
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Germany can approve a new package of aid in the face of inflation