"Many, many billions of euros." Germany to open 'purse strings', German finance minister promises – The Economic Journal


German Finance Minister Olaf Scholz presented the State Budget 2020 plan, in which the plan is a strong bet on increasing investment while maintaining a zero deficit. Scholz plans to spend almost € 360 billion without a deficit, investing in work and social affairs, as well as relieving low-income families, reports Reuters.

Following the presentation, the finance minister assumed that Germany is ready to inject “many, many billions of euros” into its economy to contract a significant slowdown in growth and that the country has to take drastic measures to combat climate change before be late.

Scholz's remarks are a strong indication that Berlin is ready to 'open the purse strings' to counter an economic downward spiral. This minister's testimony comes two days before the European Central Bank releases the cocktail of measures aimed at boosting the eurozone economy, at a time when there is talk of a recession.

Speaking to German lawmakers during the general debate on next year's state budget, Scholz assured that Germany is in a position to do more if an economic crisis does indeed occur due to sound budget planning and rigid policy. of not taking on new debt.

"It will be very important for us, as the largest economy in the middle of the European Union, if we can fight a negative economic trend," said the finance minister. “With the solid financial foundations we have today, we are in a position to fight a multi-billion euro economic crisis, whether it happens in Germany or in Europe,” said Olaf Scholz.

Exports have been a major driver of German economic growth, but they have been facing a global slowdown, with trade tensions between China and the United States rising and chaotic uncertainty over the UK's exit from the Union. European

In the second quarter of this year, the German economy contracted by 0.1% and the weak data presented fueled several rumors about Europe's largest economy, where it could collapse and lead the country into recession for the first time since 2013.



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