Weekly affairs in Germany's federal parliament, the Bundestag
Second Supplementary Budget in Germany Extended for Economic Recovery
The German government has extended the Second Supplementary Budget, initially approved in 2021, to address ongoing economic challenges. The budget, amounting to 60 billion euros, was originally planned to expire at the end of the year, but has now been extended to continue supporting the recovery of the economy.
The main objectives of this extended budget remain focused on pandemic-related economic stimulus and social protection measures. These include:
- Supporting businesses and workers affected by the pandemic through subsidies and the Kurzarbeit (short-time work) scheme.
- Sustaining social welfare programs to mitigate the impact of economic disruptions.
- Supporting public investment and stabilizing the economy to foster recovery.
This extension is a part of a broader fiscal effort that includes subsidies, loans, and social support, totalling around 130 billion euros in 2020-2021. The aim is to cushion the economic shock and enable a robust recovery, as evidenced by positive GDP growth in 2021 and 2022, despite ongoing challenges such as supply chain disruptions and the energy crisis.
The Economic Stabilization Fund (WSF) has also seen changes. Previously, there was no application deadline for the fund. However, with the extended budget, companies now have until April 30, 2022, to apply for funds. To simplify the use of these funds, the basic and bonus pots will be merged.
In addition, a special fund amounting to 3.5 billion euros has been set up for the expansion of full-day care infrastructure. Starting from 2026, students will have a legal entitlement to full-day care, with the entitlement gradually expanding to include grades two to four.
The extension of the Second Supplementary Budget was made possible by the suspension of the constitutional "debt brake." The EU Commission has also extended the temporary framework for state aid until the end of June 2022.
A corresponding application by SPD, Alliance 90/The Greens, and FDP to retain the adjustment procedure for the 20th legislative period is being discussed this week. The extension of the deadline by one year will allow the program to continue to have a positive impact on the economy and ensure more funds can be used.
Read also:
- Court petitions to reverse established decision on same-sex marriage legalization
- Proposed Standardization of Food Labeling Laws Among Member States by the Commission
- Experimenting with Merz's Germany has stretched into an extended period of time, resembling a numerous three-month duration.
- Moderate discussions scheduled between U.S. President Trump and India's Prime Minister Modi next month, according to recent reports.
