Germany could call in $55bn as stimulus

21 August, 2019 12:00 AM printer

Berlin: German Finance Minister Olaf Scholz suggested Germany could muster €50 billion ($55 billion, Dh203.5 billion) of extra spending in an economic crisis, putting a number on a possible fiscal stimulus for the first time.

While Scholz signalled that action by Germany isn’t imminent, domestic and global warning signs are increasing pressure on Chancellor Angela Merkel’s government to consider suspending its balanced-budget policy. They include an economy that shrank in the second quarter and the risk of expanded trade conflict with the US, report agencies.

Scholz mentioned the number in the context of extra borrowing during the financial crisis more than a decade ago, saying “the last crisis cost us €50 billion, according to my estimates. We have to be able to muster that and we can muster that.

“The biggest problem is uncertainty, including that caused by the Chinese-US trade war.”

Germany’s auto industry has been a frequent target of President Donald Trump and could get hit if he follows through on tariff threats against the European Union.