Germany is preparing for the second round of stimulus during the crisis caused by the pandemic COVID-19. For the salvation of the main economies of Europe, it is planned to provide assistance with capacity from 50 up to 100 billion euros, according to Bloomberg, citing sources.
In late March, the German government has already approved a number of bills aimed at citizens and companies. It has provided assistance in the amount of 156 billion euros. So, to support the self-employed, it was envisaged 50 billion euros. In addition, it was decided to establish the Foundation of economic stability in the amount of 600 billion euros, which includes loan guarantees for companies for 400 billion euros.
According to Bloomberg, while the ruling coalition that includes the bloc of the Christian democratic and Christian social unions (CDU/CSU) and Social democratic party of Germany (SPD), has not agreed to the new amount. Finance Minister Olaf Scholz (SPD) insists to allocate more funds. The conservative bloc of Angela Merkel, by contrast, does not intend to get into large debts.
In particular, Scholz proposed the creation of a rescue Fund with a volume of 57 billion euros, to compensate for German communities the reduction of corporate tax revenues to help repay existing debts. Supporters of Angela Merkel and she did not think it necessary to help communities.
The Finance Minister is also in favour of increasing the size of subsidies for families with 204 euros per child up to 300 euros. The Chancellor and her companions is not against such plans, however, I believe that the main beneficiaries should be in need of support for families with low income.
Whatever the final decision on all matters will be taken during the meeting on 2 June.
The new measures are meant to save the German economy from the worst drop since the end of world war II. According to experts, the collapse of GDP by the end of 2020 will amount to 6.3 percent.
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