Germany Parties Clashing Over Pandemic Relief Package

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German Finance Minister, Olaf Scholz, is running into opposition from Chancellor Angela Merkel’s conservatives over a relief plan worth 57 billion euros ($61.65 billion) aimed to help municipalities cope with the economic effects of the coronavirus pandemic.

The largest economy in Europe is facing its biggest recession since World War II, as the drop in business activity has hit tax revenues and public finances.

The package from Scholz, a Social Democrat, is aimed to help cities and towns stabilize their finances with a cash injection to help compensate for an expected fall in tax revenues.

“This protective shield should not only bring cities and municipalities through the current difficult situation, but also enable them to do their job even better,” explained Scholz.

Scholz’s plan is for the 16 state governments to shoulder half of the costs and for parliament to approve the plan before the end of this year.

But the plan is being criticized by the conservative party in the country.

Budget chief, Eckhardt Rehberg, has been outspoken about his criticisms of the plan and has said that no approval has been given for it.

“Scholz can’t just decide on his own about the federal budget and distribute a double-digit billion euros sum across the country,” he said of the package.

Germany is expecting total tax revenues to come in 98.6 billion euros lower than initally predicted before the outbreak, with municipalities facing a budget gap of more than 15 billion euros.

Countries around the world are having to contend with the economic fallout of the pandemic, and the lockdown policies that were put in place as a result. As the pandemic continues, more relief may be needed.

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