November 18, 2019 / 2:46 PM / a month ago

Merkel, Scholz push back against demands for higher public spending

German Chancellor Angela Merkel and Vice Chancellor and Finance Minister Olaf Scholz attend the weekly cabinet meeting in Berlin, Germany, November 13, 2019. REUTERS/Fabrizio Bensch

BERLIN (Reuters) - German Chancellor Angela Merkel and Finance Minister Olaf Scholz on Monday brushed aside demands by the BDI industry association and the DGB labor union to ditch their balanced budget policy and boost investment with a debt-financed spending plan.

Merkel told reporters after a cabinet meeting that the “black zero” policy of no new borrowing remained the guiding principle as the government was still able to generate growth.

Scholz said the government had already increased public investment to record levels, adding that he viewed the rare joint spending call by BDI and DGB rather as a support of his expansionary fiscal policy.

Reporting by Michael Nienaber, editing by Tassilo Hummel

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