Germany faces €1.3 trillion COVID bill

The cost of dealing with the fallout of the coronavirus pandemic and subsequent lockdowns in Germany is expected to reach €1.3 trillion ($1.6 trillion), according to government figures.

The calculation, published Thursday by the Redaktionsnetzwerk Deutschland (RND), came in a Finance Ministry response to a request by Dietmar Bartsch, the parliamentary leader of the socialist Left Party.

The total sum includes "all aid packages, launched by the federal and state governments to date," the loss of revenue due to the crisis and guarantees at the federal and state level for €826.5 billion, according to the report.

The report also calculated that a further €184 billion would be needed in 2021, although this may also include unused or partially unused funds from 2020.

Where do the costs fall?

The largest share of the costs fell on the federal government with spending from the national budget and the Economic Stabilization Fund reaching €397.1 billion.

Further costs were broken down by state budgets (€82.8 billion), municipal budgets (€2.3 billion) and social security funds of €27 billion with most of that spending (€25.5 billion) going towards unemployment and reduced-hours worker (Kurzarbeit) compensation.

Who will pay for the crisis?

Bartsch requested the information after raising concerns over how the costs would be financed.

"The crisis is becoming historically expensive, the costs are rising from week to week and the federal government has so far not bothered to work out who will pay for them," he told RND.

Bartsch expressed his worry that the costs would be unloaded on the poor and middle classes despite the rising fortunes of the super-rich during the pandemic.

He said there was a real threat of "the middle class the small people being hammered by taxes and cuts if we don't go after those who have profited from the crisis."

The socialist politician proposed introducing a new "burden-sharing resolution" in parliament before next year's election.

ab/mm (AFP, Reuters)