Germany may bust budget rule again

19 May, 2021 12:00 AM printer

BERLIN: Germany may have to breach its balanced budget policy for a fourth year in a row in order to fund more ambitious climate protection policies which were recently agreed, its economy minister said Monday.

Chancellor Angela Merkel’s government had been eyeing a return to its golden rule of fiscal discipline in 2023, after signing off record borrowings in 2020-2022 to fight the economic blow of the pandemic, reports AFP.

But the plan for 2023 “is now outdated,” Economy Minister Peter Altmaier told the Rheinische Post daily.

“The expansion of renewable energies must now go faster than previously planned because of the stricter climate protection law,” he said.

The German government last week agreed on more ambitious targets to reduce CO2 emissions, after the country’s top court declared a flagship climate law “insufficient”.

Under the new plan, Berlin expects to slash emissions by 65 percent by 2030 compared to 1990 levels, going further than the current 55 percent reduction target.