By Carolynn Look
Germany is sticking to its program for federal debt sales in the second quarter for the time being even as the government pursues plans to massively ramp up spending on defense and climate protection.
Debt issuance will total 106.5 billion euros ($117.4 billion) in the three months through June, in line with a plan published in December, according to a statement by the German Finance Agency on Wednesday.
The Agency added the usual caveat that amounts and issue dates may change depending on the ruling coalition’s financing requirements. At the same time, the government plans to stick to the issuance program already adopted “to the largest extent possible,” the Agency said.
German Finance Minister Christian Lindner last week outlined plans for a big increase in net borrowing this year, including at least 200 billion euros of additional new debt to finance outlays for defense and climate protection.
The government is also spending heavily to offset the lingering impact of the coronavirus pandemic on the economy and to ease the burden on consumers from higher energy prices.
About half the new debt — 99.7 billion euros — is in the regular federal budget, but the final amount is set to be even higher as the country attempts to offset the impact of Russia’s invasion of Ukraine. The other half is for a separate 100 billion -euro fund to finance a big increase in military expenditure.
Chancellor Olaf Scholz said Wednesday in a speech to parliament that Lindner will be working on finalizing the 2022 budget adjustment in coming weeks.
The total for new borrowing this year is already the second-highest since the Second World War, just short of last year’s record of 215 billion euros.
In December, the finance agency said total debt issuance in 2022 will likely be about 410 billion euros. The next update of the issuance schedule inculding details of plans for the third quarter will be published in June.
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