Germany to return to austerity after coronavirus crisis

Germany will return to its savings policy once the coronavirus crisis is over, Economy Minister Peter Altmaier told ZDF broadcaster on Tuesday. A day earlier the government agreed a package worth up to 750 billion euros to mitigate the damage of the coronavirus outbreak, with Berlin aiming to take on new debt for the first time since 2013.

“Once the crisis is over - and we hope this will be the case in several months - we will return to austerity policy and, as soon as possible, to the balanced budget policy,” he said adding that “the conditions are only so favorable because everyone believes in us and trusts that we will only do this as long as is necessary.”

The government expects the pandemic to plunge the economy into recession. Finance Minister Olaf Scholz has said his latest budget plans are based on the assumption that GDP will shrink by roughly 5% this year.

The government has announced a range of measures to cushion the blow for companies during the crisis and Altmaier reiterated that the state was prepared to buy stakes in companies that were struggling but only in the most extreme cases. Seeking to reassure firms and freelancers, Altmaier also said it should be clear from the middle of next week where they can obtain aid to help tide them over during the crisis and German authorities were trying to avoid bottlenecks.

Germany has over 29,000 confirmed coronavirus cases and 123 people have died, the Robert Koch Institute for infectious diseases said on Tuesday.

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