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German committee approves 217.8 billion euros of new debt for stimulus package

BERLIN (Reuters) - Germany’s parliamentary budget committee gave the green light to a second supplementary budget on Wednesday to finance a bumper stimulus package aimed at helping Europe’s biggest economy recover from the impact of the coronavirus.

Germany is facing its deepest recession since World War Two and after slight changes, record new debt of up to 217.8 billion euros is planned for this year, just below the original target of 218.5 billion euros.

The difference is due to reallocation of funding rather than a reduction in the package, which includes a temporary cut in sales tax, a child bonus and help for firms and municipalities.

The Bundestag lower house of parliament is expected to pass the extra budget on Thursday.

“The record new debt of 217.8 billion euros does not make me happy, but it is essential in light of the severity of the economic collapse caused by the corona pandemic,” said Eckhardt Rehberg, budget spokesman for Chancellor Angela Merkel’s conservative parliamentary group.

“We must reduce deficits again in coming years and return to the path of balanced budgets,” he added.

Reporting by Holger Hansen; Writing by Madeline Chambers; Editing by Kirsten Donovan