Scholz from Germany for the Covid crisis, vaccinations and higher taxes

This is not the time to consider the complete reopening of the German economy, but rather the time to be strict and keep coronavirus infections low, the German finance minister told CNBC, adding that richer households will soon pay more. many taxes.

“This is not the time to open up. This is the time to be very tough, to keep infection rates low,” German Finance Minister Olaf Scholz told CNBC’s Annette Weisbach on Tuesday.

Europe’s strongest economy has suffered from the coronavirus pandemic, facing various waves of infections and subsequent blockages. In 2020, the German economy contracted by almost 5%, according to International Monetary Fund data and is seen growing by only 3.6% this year.

At the same time, opposing public health messages from national and regional leaders have further complicated the situation.

Armin Laschet, the leader of North Rhine-Westphalia, for example, said on Monday that there should be a national blockade. But it was not until last week that he called for flexibility so that the various state leaders could fight the pandemic as he saw fit. Chancellor Angela Merkel has also canceled plans to block Easter.

“If we could take similar measures everywhere, this would help a lot and make it easier to understand,” Scholz said, referring to different regional approaches.

There has been growing demand in Germany for a more united approach in the fight against coronavirus. Citizens are frustrated by different arrangements between different regions, while infections continue to grow.

Merkel herself called for a closer and more uniform approach across the country, but regional leaders have so far prevented this.

On Tuesday, Germany reported more than 2.9 million cases of Covid-19 and 77,103 deaths, according to the European Center for Disease Prevention and Control.

At the same time, there are concerns about the timing of the launch of vaccination. Germany has distributed 22.8 doses of Covid-19 photos to 100 people since Monday, according to ECDC. It is smaller than France, Cyprus, Ireland and Hungary – just to name a few examples in the EU.

In addition, German health experts decided last week to suspend the use of the Oxford-AstraZeneca shot for people under the age of 60 due to renewed concerns about reports of blood clots. This could become another obstacle to wider deployment, as fewer people are now eligible to receive this vaccine and the number of vaccines available is still relatively limited.

Speaking to CNBC, Scholz appeared confident in the coming weeks and months about vaccinations against Covid.

“I think we will reach a situation where at the end of this month there will be 4 to 5 million doses per week,” he said.

“I think this will make the necessary progress and that is why we need to be strict now, because if we are strict in reducing infections, it will be easier to have successful vaccination,” he added.

Scholz, a high-ranking figure in Germany’s Social Democratic Party, said earlier that the country needed to do whatever it took to get out of the coronavirus crisis.

Germany is expected to borrow more than 240 billion euros this year to support the economy, a problem that more fiscally conservative lawmakers have challenged. Germany has a long history of keeping its finances under control, after legislating in 2009 that governments could not afford significant new debt.

The coronavirus pandemic has changed the dynamics around German debt, as several experts say the government must continue to provide incentives.

“We will continue to do whatever it takes. It’s expensive – but doing nothing would lead to even higher costs,” Scholz told reporters late last month.

But with more loans, there will be more taxes.

Germany “will have the chance to address all the burdens that come from the fight against coronavirus with better growth in the coming years,” Scholz said, before adding: “There is obviously a situation where there is no time for tax cuts. for the rich people or for big corporations. “

“There is a need for tax exemption for low- and middle-income people in households, but obviously those who are very rich, who have very high incomes, and companies could not expect tax cuts,” he said.

Germany is preparing for the national elections at the end of September. Merkel, who has been chancellor of Europe’s largest economy for 16 years, said she would not seek a fifth term.

“I am sure there will be a change after the next election. As you know, I am running for the next chancellor, and my party wants to lead the next government and the chances increase,” he said.