BERLIN, Jan 25 (Reuters) - Germany faces huge fiscal challenges following the COVID-19 pandemic and won't be able to stick to its strict debt limits for years, Chancellor Angela Merkel's chief of staff was quoted as saying on Monday.
The comments by Helge Braun are the clearest sign yet that Berlin is set to continue its fiscal splurge by taking on new debt even if the coronavirus crisis should be overcome.
"The debt brake cannot be adhered to in the coming years even with otherwise strict spending discipline", Braun wrote in an op-ed piece for business daily Handelsblatt to be published in its Tuesday edition.
The so-called debt brake rule in the German constitution normally limit new borrowing by the federal government to 0.35% of economic output, but parliament suspended it for 2020 and 2021 due to the coronavirus crisis.
Braun suggested that parties should agree on changing the constitionally enshrined debt limits in a way that more debt would be possible for a couple of years. But the deal should include a "clear date" when Germany would return to the rule.
Finance Minister Olaf Scholz is planning for record new debt of up to 180 billion euros ($218.5 billion) this year to continue rescue and stimulus measures to shield Europe's largest economy from the impact of the COVID-19 pandemic.
This comes after Berlin took on net new debt of 130.5 billion euros, the highest level of annual borrowing in post-war history. ($1 = 0.8239 euros) (Reporting by Michael Nienaber; Editing by Edward Taylor and Alex Richardson)
