Germany's Scholz: We can unleash more stimulus if needed

BERLIN (Reuters) - Germany has enough fiscal firepower to unleash more rescue and stimulus measures if needed to counter the impact of the COVID-19 pandemic on Europe’s largest economy, Finance Minister Olaf Scholz said on Thursday.

FILE PHOTO: German Finance Minister Olaf Scholz briefs the media during a visit at the Charite hospital, to get first hand information from doctors working with coronavirus disease (COVID-19) patients in Berlin, Germany, November 9, 2020. Markus Schreiber/Pool via REUTERS

“Our country has the financial strength this year and next to do everything that is necessary to keep control of the pandemic and to cushion the related economic consequences,” Scholz told the RND newspaper group.

Germany has since March unleashed an unprecedented array of rescue and stimulus measures, financed with record new borrowing of up to 218 billion euros (£194 billion) for which parliament suspended strict borrowing limits in the constitution.

A government source told Reuters last month that Scholz was planning to take on an additional 120 billion euros of new debt next year to finance further aid measures and help companies survive the second wave of the pandemic.

“If needed, we can do more,” Scholz said, adding that citizens had to get used to the “new normality” of social distancing and curbs to slow the spread of the coronavirus.

As long as doctors didn’t have therapies and citizens were not vaccinated, authorities had to watch the development of the pandemic very closely and act quickly to avoid having hospitals reach their limits, Scholz said.

Scholz said the measures implemented so far were working.

“The economy has quickly recovered, the economic slump is at least limited, and things are going much better than expected,” he said.

The government is currently working out the details of a new aid package worth up to 10 billion euros to compensate restaurants, bars, theatres, cinemas and gyms which have been forced to close since Nov. 2.

Scholz signalled more financial help for the self-employed, artists and organisers of cultural events. He said the ministry was in talks with the European Commission to solve legal questions and that he hoped a deal could be reached soon.

Reporting by Michael Nienaber; Editing by Nick Macfie