Germany’s lower house of parliament is expected to pass a €750 billion ($814 billion) aid package on Wednesday to cushion the economy from the direct impact of the coronavirus outbreak.
In order to fund the emergency measures, Chancellor Angela Merkel’s government is planning to take on new debt for the first time since 2013.
The debt ceiling anchored in Germany’s Basic Law, or constitution, would need to be suspended to allow the government to raise €156 billion in new borrowing.
What are lawmakers saying?
At the start of the debate in parliament, Finance Minister Olaf Scholz stressed that the government was doing everything in its power to mitigate the damage and protect jobs, businesses and the health sector.
“There’s no script for this,” Scholz told lawmakers, who were sitting in the chamber with 1.5-meter gaps between them, as required under new social distancing rules.
“We are experiencing a crisis that is unprecedented in the Federal Republic of Germany,” he said. “What we need now is solidarity.”
Justice Minister Christine Lambrecht told Germany’s Handelsblatt newspaper that she would support nationalizing companies to protect them from bankruptcy.
“It is vital that we protect the economic structure of our country during the crisis and prevent the sale or break-up of important companies,” she said. “The state is prepared to acquire full or partial stakes in companies, should it become necessary.”
What is the situation in Germany?
Germany — Europe’s biggest economy — has stopped short of implementing the kind of nationwide lockdown seen in other countries, but it has banned gatherings of more than two people and imposed stricter social distancing rules.
Germans are still allowed to go to work and exercise outside, provided they maintain at least a 1.5-meter distance from others.
Nonessential shops and services have been ordered to shut. Restaurants and cafes can only offer food delivery or take away. These measures are expected to remain in place until April 6.
Schools across the country will remain closed until the Easter holidays end on April 24.
What are other countries doing?
The coronavirus pandemic has led to widespread fears of a global recession. Germany’s measures come after similar moves by other countries to limit the economic fallout.
In the US, lawmakers have agreed to a stimulus deal worth $2 trillion (€1.85 trillion) to help aid workers, businesses and the healthcare system.
France has announced a €45 billion aid package to help businesses and workers, while the UK has unveiled a package of measures including €362 billion in loans and €22 billion in other aid to shore up the economy.
nm/rt (Reuters, dpa)