German Parliament approves 140 billion euros of additional debt in 2022

BERLIN: The budget committee of the German Bundestag (lower house of parliament) has passed the country’s annual budget for 2022, authorizing total spending of 496 billion euros ($523.5 billion) and about 140 billion euros in new debt.

The German Bundestag adopted the country’s annual budget for 2022 on Friday, the Xinhua news agency reported.

The new debt includes an additional budget of around 40 billion euros which was presented at the end of April for “measures directly related to the consequences” of the Russian-Ukrainian conflict, according to the Federal Ministry of Finance (BMF).

German Chancellor Olaf Scholz announced earlier this year the creation of a special defense fund worth 100 billion euros, stressing that the country would strive to raise its annual defense spending to 2 % of GDP.

Due to the measures linked to the Covid-19 pandemic, Europe’s largest economy had already planned to go into debt to the tune of nearly 100 billion euros before the start of the Ukrainian crisis.

To do so, the country’s so-called debt brake, which stipulates that federal and state budgets must generally be balanced without borrowing income, has been temporarily suspended.

Finance Minister Christian Lindner strongly supports restoring compliance with the debt brake.

“You have to find the way out of crisis mode,” he said last week. (1 euro = $1.06)

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