To date, Germany has approved an initial rescue package worth more than € 750 billion to mitigate the effects of a coronavirus outbreak, with the government accepting a new debt for the first time since 2013.
The package was divided into a debt-financed supplementary budget of EUR 156 billion agreed in March and a stabilization fund of EUR 600 billion for loans to entrepreneurs and direct holdings in companies.
The German economy, the largest in Europe, is facing its deepest recession since World War II, although blocking the spread of the virus is gradually easing.
“The logical consequence of this is that the federal government must invest more money in the social security system to stabilize contributions in 2021,” said German Health Minister Spahn.
But according to German officials, the incentive will not be enough and Germany will have to stabilize its social security system through cash injections. Experts estimate billions aimed at mitigating the effects of coronavirus on health, the labour market and pensions.
However, in the labour market alone, the Labor Office, at worst, pointed out that the government would have to inject EUR 15 billion by 2020 and 2021 to avoid higher payments from employers and employees. The public health sector will play up to € 14 billion in the budget this year.
On the other hand, according to preliminary estimates, the federal and state governments, as well as municipalities, will see tax revenues of about 100 billion euros less this year than originally expected.
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