Was Germany Right to Hoard Its Money After All?
Fiscal hawks say Berlin’s balanced budget is why it has so much cash to splash around now. But that ignores Germany’s special role in the euro zone.
In quarantine, but leading.
Photographer: Fabrizio Bensch/AFP via Getty Images
Two cheers for Germany. Finally, after years of pretty much the whole world berating Europe’s largest economy for being wilfully stingy with its public purse, the government has thrown away its fiscal water pistol and pulled out the bazooka. It’s too bad it took a pandemic to get to this point. But better late than never.
Today the cabinet of Chancellor Angela Merkel, herself in quarantine after exposure to an infected doctor, announced additional government borrowing of up to 350 billion euros ($376 billion). Some 150 billion euros of that will go to a much larger federal budget this year, the rest to a new rescue fund. The package, which comes on top of hundreds of billions already promised in loan guarantees and other measures, will be rushed through both houses of parliament by Friday.