(Bloomberg) -- Germany is considering a “targeted” stimulus plan to revive economic growth once the coronavirus epidemic subsides, Finance Minister Olaf Scholz said in a Bloomberg TV interview.
“The question of stimulus is coming when we are coming through the crisis,” Scholz said after the government secured emergency powers for an unprecedented rescue package. “It must be timely, targeted and temporary to help the economy start again.”
After years of budget surpluses, the government has the resources and tools available to pull Europe’s largest economy through the fallout from the disease. The spending would come on top of what was already agreed.
“We have all the firepower we need, and we will use it,” said Scholz, who spoke earlier in parliament in place of Angela Merkel. The chancellor remains in precautionary quarantine at home.
Scholz -- one of the key architects of a historic 750 billion-euro rescue package -- has been the face of Germany’s efforts to tackle the economic fallout. The Social Democrat has vowed to do whatever is necessary to secure German jobs and businesses, saying years of budget surpluses gives the country the leeway to spend freely now.
Backed by broad political support, the government plans to unleash a barrage of debt-financed measures to counter what Merkel and Scholz have both called the biggest challenge to Germany since World War II. The package includes loans, guarantees and aid for large and small companies as well as money to buy stakes and even completely nationalize some stricken businesses.
The measures come as the economy braces for its biggest slump in decades. Business confidence is collapsing at a record pace amid restrictions to slow the spread of the disease, and the Ifo economic institute predicted mass bankruptcies in what is likely to be a deeper recession than during the financial crisis.
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