German Finance Minister: Unwilling to Cut Investment, Social Welfare Spending
20 February 2021
By David Barwick – Frankfurt (Econostream) – German Finance Minister Olaf Scholz made clear over the weekend that he would be unwilling to reduce government spending on investment and social welfare.
In an interview with German daily Mannheimer Morgen, Scholz, according to a text made available by the Finance Ministry, reaffirmed the solidity of German’s fiscal position, stressing that pre-pandemic government debt was less than 60% of GDP.
‘And after this crisis as well we will have lower indebtedness than all other G7 countries before the crisis’, he said. ‘The next budget will be a challenge, however: I am not willing to cut investment expenditures and thus risk the future of our country. The welfare state, which is getting us through this crisis well, will also not be cut.’
Scholz is his party’s candidate for Germany’s chancellorship in the September 26 elections.
The German government is ‘ambitious when it comes to repayment’ of the debt, he said with respect to plans to repay €15 billion annually from 2026. Germany’s previous ‘many years’ of debt-free budgets leave it prepared, he said.
Scholz called the Covid-19 incidence rate of 35 as a benchmark for economic re-opening ‘important, because we need a certain buffer – otherwise the next lockdown will soon threaten.’