Germany to suspend debt brake again in 2021, says Scholz

BERLIN, Aug 19 (Reuters) - Finance Minister Olaf Scholz said on Wednesday he expects Germany to suspend its constitutionally enshrined debt brake in 2021 after doing so this year to help Europe’s biggest economy cope with the effects of the coronavirus pandemic.

After years of fiscal prudence and a longstanding commitment to a balanced budget, the German parliament in March suspended the debt brake as it introduced stimulus measures.

“We will have to do it again next year,” Social Democrat Scholz, who will run to be chancellor in next year’s election, said at a party event.

The German economy contracted at its steepest rate on record in the second quarter due to the fallout of the crisis and the government has agreed stimulus measures worth more than 130 billion euros to help a return to growth. (Reporting by Christian Kraemer Writing by Madeline Chambers Editing by Chizu Nomiyama)