‘We have finances well under control’: Germany takes on less debt than expected in 2020

Germany took on record new debt in 2020 to shield the economy from the coronavirus pandemic, but less than expected, official data showed Tuesday.

'We have finances well under control': Germany takes on less debt than expected in 2020
Did Germany save more than it thought it would? Photo: DPA

“Despite the pandemic, we have the finances well under control,” Finance Minister Olaf Scholz told reporters.

Europe's largest economy took on €130.5 billion in new borrowing last year.

The amount is the highest since German reunification in 1990, but still less than the 218 billion in new debt authorised by parliament to deal with the health crisis.

In part this can be explained by a weaker than expected economic slump, thanks to a strong rebound during the summer, the finance ministry said.

Germany's economy contracted 5.0 percent in 2020, 0.5 percentage points above the government's estimates, and a smaller decline than during the 2009 financial crisis when output shrank by 5.7 percent.

Some public investments, including in Germany's state-owned rail company Deutsche Bahn, were also postponed to 2021.

Further keeping the lid on 2020's debt figure were delayed payments to businesses hit by Covid-19 shutdowns. Technical problems and red tape meant that many companies only saw payments arriving at the beginning of this year.

Scholz has promised to “simplify and extend” the aid.

READ ALSO: 'We'll be struggling well into next year': German borrowing to soar amid pandemic

Famously frugal Germany abandoned its cherished “debt brake” last year to cope with the pandemic fallout.

The constitutionally-enshrined rule forbids the government from taking on new debt of more than 0.35 percent of gross domestic product (GDP) in any one year in normal times.

Chancellor Angela Merkel's government has pledged nearly one trillion euros in aid and stimulus to help German companies and employees, including through massive short-time work schemes.

In total, Berlin plans for €300 billion of new debt between 2020 and 2021.

Germany's debt-to-GDP ratio climbed to 70 percent in 2020, Germany's central bank said in December, breaching a European Union maximum of 60 percent.

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EXPLAINED: The new rules around getting a sick note over the phone in Germany

Due to high Covid infection numbers throughout the summer, it’s now possible to get a sick note from a doctor over the phone again for some illnesses. Here’s what you need to know.

EXPLAINED: The new rules around getting a sick note over the phone in Germany

What’s happened?

In spring 2020, German authorities changed the law so that people with a mild upper respiratory tract illness, such as the common cold, were able to get an incapacity to work certificate or AU-Bescheinigung by simply calling and speaking to their GP.

The rule was extended several times and finally reversed on June 1st this year due to falling infection figures. Since then people have had to go back to the practice – or do a video call if the doctor’s office has that system in place – to get a sick note.

Now, due to a decision by the Joint Federal Committee, the regulation has been reintroduced and patients can call their GP again for a sick note.

Can I get a sick note over the phone for any illness?

No. As before, the regulation only applies to patients suffering from a mild upper respiratory tract illness. Though Covid has not explicitly been named in the announcement, it seems that it is intended to be covered by the regulation.

If the doctor is convinced that the patient is unfit for work after a telephone consultation, then they can issue a sick note for up to seven days.

READ ALSO: EXPLAINED: The changes around doctor’s notes in Germany you should know

If the symptoms persist after seven days, the certificate can be extended once more for another week.

Why now?

According to the Chairman of the G-BA, Josef Hecken, the regulation has been introduced now as a response to rising Covid numbers and in anticipation of the cold and flu season in the coming months: “We want to avoid full waiting rooms in doctors’ offices and the emergence of new infection chains,” he said.

The telephone sick leave rule is a simple, proven and uniform nationwide solution for that, he said. The rule is also necessary because video consultation hours are not yet available everywhere.

What else should I know?

The health insurer DAK is calling for telephone sick leave in the case of light respiratory diseases to be made possible on a permanent basis in Germany. DAK’s CEO Andreas Storm said that this should “not always be up for debate, because it has proven itself.” 

READ ALSO: Everything you need to know about making a doctor’s appointment in Germany

The social association VdK also welcomed the reintroduction of the rule. The VdK’s President Verena Bentele said that the regulation would help to protect high-risk groups in particular from potential infections.

What are the rules to know about sick notes in Germany?

Germany has a strict system in place. If you are sick, you need to give your employer a Krankmeldung (notification of sickness) before the start of work on the first day (of your illness).

However, you also need to hand in a Krankschreibung (doctor’s note) on the fourth day of your illness. Some employments contracts, however, require you to submit a sick not earlier than the fourth day so check with your boss or HR on that point.