German Bundesrat, the upper house of the federal parliament, on Wednesday allowed the supplementary budget passed by the German cabinet at the beginning of the week to finance the costs of the coronavirus crisis.
For the planned aid packages for companies, hospitals and employees, the German government wants to provide 122.5 billion euros (132.5 billion U.S. dollars). At the same time, the taxes the German government expected to receive this year will drop by around 33.5 billion euros, compared with previous forecast.
To finance the aid packages as well as to counter falling tax revenues, the draft law would entitle the German government to take out new loans amounting to 156 billion euros.
“This means that the constitutionally prescribed debt brake will be exceeded,” the Bundesrat noted in a statement. “According to the Basic Law, this is only permissible in the case of an emergency situation, which the Bundestag must decide on with the majority of its members.”
The decision of the Bundesrat was forwarded directly to the Bundestag, the lower house of parliament, which adopted the supplementary budget on Wednesday in a second and third reading.
The supplementary budget is scheduled to be finally passed in a special session of the Bundesrat on Friday.