BERLIN, Germany (AFP) — Chancellor Angela Merkel signaled Wednesday that she does not rule out suspending a self-imposed dogma of keeping Germany’s budget balanced in the fight against the coronavirus outbreak.
“It is an extraordinary situation, we will do what’s necessary and luckily Germany is relatively robust… we see at the end of that where our budget stands,” she said, stressing that ending the virus crisis “comes first”.
Maintaining a balanced or “black zero” budget has been a key campaign selling point of Merkel’s government, which believes that it would be irresponsible for the fast aging nation to incur more debt that would be left to a shrinking workforce to service.
But with the coronavirus outbreak forcing some countries to shut borders, companies to keep workforces home and as foreign orders collapse, calls have grown for Merkel’s government to help prop up Germany’s economy.
“An economy like Germany’s, which is extremely export-dependent, is, of course, harder hit by global challenges than one that is very concentrated on” its domestic demand, acknowledged Merkel, saying that the government will announce liquidity help for firms.
Underlining the need to throw all resources at stemming contagion, the German chancellor also said Berlin will look the other way if severely hit countries like Italy were to flout the EU’s rules on limiting public deficit as it fights the virus.
“On the European level regarding the stability and growth pact, we will be flexible. That was an important conclusion yesterday.”
© Agence France-Presse