Germany plans supplementary budget to cope with Ukraine impact - sources

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[March 14, 2022]  BERLIN (Reuters) -Germany's finance minister will present a draft budget for 2022 to the cabinet on Wednesday but will later introduce supplementary fiscal plans to reflect the impact of the war in Ukraine on the economy, ministry sources said.

 

Christian Lindner's draft budget envisages net new debt of 99.7 billion euros ($109.4 billion) in the core budget, plus 100 billion in credit authorisations for a planned special fund for the military, they said on Monday.

However, this budget will only be valid for the time being. Supplementary measures would reflect the impact of the war in Ukraine on the economy and further support measures from the government, which would have an impact on public finances.

Lindner has signalled potential support for companies that are in danger of collapse owing to sanctions imposed on Russia.

He wants fast and accurate relief from high energy prices, a spokesperson for the finance ministry said on Monday.

The plan he will present on Wednesday sees net new debt falling to 7.5 billion in 2023, before rising to 13.7 billion in 2026, the ministry sources said.

The German government sees the economy, Europe's largest, growing by 3.6% in real terms in 2022, by 2.3% in 2023 and then by 0.8% annually from 2024-2026, one source said. However, these forecasts do not include the impact of the Ukraine war.

Updated economic estimates are due in the spring, the sources said.

($1 = 0.9116 euros)

(Reporting by Holger Hansen and Paul Carrel)

 

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