BERLIN -Germany plans to increase new debt by 39.2 billion euros ($42.04 billion) this year to cushion Europe's biggest economy against the fallout from Russia's invasion of Ukraine, government sources said on Monday.
The envisaged new borrowing will take Germany's net debt in 2022 to 138.9 billion euros.
Chancellor Olaf Scholz's government is on Wednesday expected to approve the debt-financed supplementary budget.
Germany temporarily suspended constitutional limits on new debt to finance unprecedented fiscal support for the economy during the coronavirus pandemic, borrowing 130 billion euros in 2020 and a record 215 billion euros last year.
Exploding energy costs exacerbated by the Ukraine crisis gave Finance Minister Christian Lindner no choice but to extend the debt-financed spending spree.
In addition to the supplementary budget, Germany has plans for 100 billion euros in credit authorisations for a special fund for the military.
The new debt will go toward funding tax relief for households and public transport commuters, as well as fossil fuel subsidies for motorists totalling some 14 to 16 billion euros, the sources said. Some 5 billion euros will go toward helping companies grappling with high energy prices.
($1 = 0.9324 euros)
