German Finance Minister Christian Lindner said Friday that Germany could finance a new aid package worth billions of euros in the face of inflation without giving up the "debt constraint". On August 11, German Chancellor Olaf Scholz promised to provide a new aid package to individuals in the face of rising prices in the energy and food sectors, which is expected to be agreed this fall. But he reiterated his commitment to return to budget discipline next year while keeping the deficit at 0.35 percent of GDP. In response to a question from the Rheinische Post newspaper about the size of this potential aid, the finance minister said that "a small number of two figures in billions of euros is possible." He added that this new package of support measures is intended for low- and middle-income families and will include "measures directed at companies that consume a large amount of energy." The inflation rate in Germany reached 7.5 percent in July, slightly lower than the 7.6 percent recorded in June. But Economy Minister Robert Habeck said the fall and winter were expected to be tough in Europe's largest economy due to the "next economics" energy crisis. Germans will face higher heating and electricity bills in the fall as the government decides to allow higher energy prices to affect the final consumer. Schulz did not specify when and how much the aid package would cost. But he reaffirmed his commitment to respect the constitutional rules of budget discipline again in 2023 after three years of exception in the face of the COVID-19 pandemic. "We expect to be able to implement our projects within the financial framework available so far," the German chancellor said. Voices, especially within the Green Party allied with the government and the Social Democratic Party, called for an extension of the suspension of the "debt brake" in the event of a sharp deterioration in the German economy.

AFP