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Germany Ready to Ditch Balanced Budget to Combat Coronavirus

  • Ruling CDU shifts from historic defense of balance budget
  • Will allow for increased spending to combat economic fallout
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Merkel Says Up to 70% of Germans Could Be Infected by New Coronavirus
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German Chancellor Angela Merkel’s administration is prepared to abandon its long-standing balanced-budget policy to help finance measures to contain the fallout of the coronavirus.

Given the dimension of the crisis, Merkel and her economic team are now willing to accept deficit spending to help finance containment measures, according to people with direct knowledge of the government’s economic policy. The virus-triggered crisis is one of the “exceptional circumstances” under the constitutional debt brake that allows for additional borrowing, said the people, who requested not to be named because the discussions are not public.