German Finance Minister Christian Lindner said the government could finance a new billion-euro relief package for the population in the face of inflation without abandoning the “debt constraint”.
In response to a question from the Rheinische Post about the size of this potential bailout, the minister said on Friday that “a small double-digit amount in billions of euros is possible.”
He added that this new support package is aimed at low- and middle-income German families and will also include “measures aimed at companies that consume a lot of energy.”
On August 11, German Chancellor Olaf Scholz promised a new package to help individuals amid rising prices in the energy and food sectors, which is expected to be agreed this autumn.
But he reaffirmed his intention to return to fiscal discipline next year, while keeping the deficit at 0.35 percent of GDP.
Inflation in Germany reached 7.5% in July, slightly below June’s 7.6%.
But Economics Minister Robert Habek said autumn and winter are expected to be tough for Europe’s largest economy due to the “next economy” energy crisis.
Germans will face higher heating and electricity bills in autumn due to the government’s decision to let higher energy prices affect the end consumer.
Schultz did not specify when or how much the aid package would cost. But he reaffirmed his commitment to upholding constitutional rules on fiscal discipline in 2023, after a three-year suspension due to the COVID-19 pandemic.
“We expect that we will be able to implement our projects within the current financial resources,” said the German Chancellor.
Aswat, especially within the government-allied Green Party and the Social Democratic Party, has called for an extension of the suspension of the debt brake in the event of a sharp deterioration in the German economy.