German Chancellor Olaf Scholz responded to calls for more broad-based economic support by pointing to the country’s tight budget situation. He stated that he did not agree that the accumulation of a debt of 100 billion euros annually is considered normal.
Schultz stressed that if they don’t want to lift the debt reins, the economy should still be propped up, but not with hundreds of billions in programs. His remarks came at a time when Germany’s total public debt has risen to unprecedented levels. According to a July report by the Federal Statistical Office, the country’s total public debt reached a record high of 2,368 billion euros last year.
The jump in German debt levels can be attributed to two main factors: the large financial resources required during the pandemic years and the ongoing energy crisis caused by the Russian invasion of Ukraine in February 2022. These events have placed enormous pressures on Germany’s economy and financial situation.
Despite the challenges, Scholz remains cautious about more large-scale economic stimulus measures that could exacerbate the country’s already tight budget situation. His comments underscore the delicate balance between necessary support for the economy and ensuring fiscal sustainability.
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