The Bundestag (German Lower House) approved on Wednesday the shock package against the coronavirus, the largest since World War II (1940-44), witha total volume of about 750,000 million euros.
The German government’s proposal, equivalent to almost 22% of German gross domestic product (GDP), was largely supported.
The package consists of a supplementary budget for this year of 156,000 million euros, which includes a rescue fund of up to 50,000 million for self-employed and small businesses and 3,500 million for urgent support to the health system. It also foresees a drop in tax collection of 33,500 million.
This budget update impliesthe temporary abandonment of the constitutional rule of “debt restraint”,a formality that was also approved this Wednesday in the Bundestag according to the exceptions contemplated in the Magna Carta.
The plan also includesthe reactivation of the Stabilization Fundcreated in the financial crisis, a tool with 600,000 million to support companies with liquidity and capitalization problems, and that even foresees temporary nationalizations.
Deputy Foreign Minister and Finance Minister Olaf Scholz previously defended the proposal on behalf of Chancellor Angela Merkel, who did not go to Parliament for being in quarantine since Sunday after learning that a person she had contact with later tested positive. by COVID-19
The objective of the government plan, he argued, is to strengthen the health system, ensure the living conditions of citizens and stabilize the economy, supporting companies and workers.
The current crisis, Scholz assured,“it is unprecedented for the Federal Republic of Germany” and is “a challenge for all humanity”.
“We will do everything possible and everything necessary to alleviate the economic repercussions. For this there is no prior script,” he said.
He also indicated that “Germany will be next to its European partners“and will support” the poorest countries “in overcoming the economic and health crises generated by the COVID-19 pandemic.
The crash plan is outpacing the legislative process in an unusually accelerated way. It was approved in an extraordinary Council of Ministers on Monday, this Wednesday it has been sanctioned by the Bundestag and its final evaluation in the Bundesrat (Chamber of Territorial Representation) will take place on Friday.