The federal government wants to fight the economic consequences of the virus crisis with record debts. Friedrich Merz thinks this is the wrong strategy. He accuses Finance Minister Scholz of waste. Releasing a brake does not mean "rushing down the mountain at full throttle," said the CDU politician.
The CDU politician Friedrich Merz accuses Federal Finance Minister Olaf Scholz from the SPD wasting money. "The finance minister is currently knocking out the money as if there was no tomorrow," said Merz of "Bild am Sonntag". "Our children will have to pay for all of this, and that is why I urgently advise you to be careful with taxpayers' money even in the corona crisis."
It was right to release the debt brake of the Basic Law this year, Merz continued. "But releasing a brake doesn't have to mean racing down the mountain at full throttle."
Merz, who is one of the candidates for the party chairmanship, is also critical of the federal government's decision to extend the short-time allowance until the end of 2021. "Short-time work allowance is there to overcome a crisis in the short term. If it is paid for too long, there is a risk of blocking the labor market. Then employees who are urgently needed in other companies are kept in their old companies with short-time work."
Lagarde for generous financial policy
ECB President Christine Lagarde, who once again strongly advocated massive government spending, takes a different view. The governments in the euro zone should continue to support the loose monetary policy extensively, pleaded the central bank chief. This is intended to promote the recovery after the historic economic slump in the course of the coronavirus crisis.
Confidence in the private sector is based to a large extent on expectations of government spending, Lagarde said. A generous financial policy is crucial to keep jobs and support private households now until the economic recovery gets stronger.
Most experts believe that massive government spending is the right thing to do during the crisis in order to mitigate the consequences. However, this increases debt in many countries. Because it is financially much better off than other countries, Germany has been able to invest a comparatively large amount in aid programs.
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