• Germany edition
 
Flush Germany balances budget early
Photo: DPA

Flush Germany balances budget early

Published: 03 Dec 2012 12:26 GMT+01:00
Updated: 03 Dec 2012 14:31 GMT+01:00

Under eurozone rules enshrined in the European Union's Maastricht Treaty, member countries are not allowed to run up deficits in excess of 3.0 percent of gross domestic product (GDP) and must balance their budgets in the medium term.

Only a few months ago, Berlin had been projecting a deficit ratio of about 0.5 percent for 2012, compared with 0.8 percent for 2011. And the overall state or public budget was expected to be balanced by 2014.

But "on the basis of our updated medium-term projections, Germany will achieve a balanced budget as early as 2012," the Finance Ministry said in a statement.

A ministry spokesman attributed the improvement to higher tax revenues and lower financing costs as a result of low interest rates.

"Based on current assumptions, the overall Maastricht deficit will be brought down completely to zero this year," the statement said.

The German economy, Europe's biggest, has managed to hold up fairly well so far, shrugging off the worst of the debt crisis that has pushed many of its neighbours into recession. Unemployment is also close to historic low levels meaning tax revenues are strong and jobless payouts low.

And while borrowing costs for debt-wracked countries are high, Germany has benefited from ultra-low borrowing costs as a result of its safe-haven status.

The public budget is even expected to move into a modest surplus of 0.5 percent in both 2013 and 2014 before coming back to zero in 2015 and 2016, according to the ministry's medium-term projections.

The country's overall debt levels are therefore also falling with the debt-to-GDP ratio projected to stand at 81.5 percent this year, two percentage points lower than forecast back in the summer, the ministry said. In 2011, the debt ratio stood at 80.5 percent.

And it could even drop as low as 73 percent by 2016, the ministry predicted.

EU rules put a ceiling of 60 percent on a member country's debt-to-GDP ratio.

AFP/mry

The Local (news@thelocal.de)

Your comments about this article

13:43 December 3, 2012 by smart2012
wow great news for pre election propaganda... but to reach it unemployment and poverty are increasing in Germany..

And btw, one third of german towns are close to bankrupt (see Ernst & Young report last month).

again, just a number which say very few...
17:24 December 3, 2012 by Berlin fuer alles
Compare and contrast this with http://www.thelocal.de/national/20121203-46543.html
Today's headlines
Criminals blow Berlin Sparkasse wide open
Photo: DPA

Criminals blow Berlin Sparkasse wide open

Unknown criminals used explosives to rob a Berliner Sparkasse bank branch in the Berlin district of Mariendorf early on Sunday morning. READ  

French retread path to Berlin finance ministry
French Economy and Finance Ministers Emmanuel Macron (l) and Michel Sapin. Photo: DPA

French retread path to Berlin finance ministry

French and German ministers are due to meet on Monday to discuss ways of boosting growth in Europe's two biggest economies, as Paris called on Berlin to step up investment. READ  

Lufthansa pilots to strike for 35 hours
Grounded. Photo: DPA

Lufthansa pilots to strike for 35 hours

Pilots' union Cockpit has called a new 35-hour walkout at Lufthansa starting Monday while rail service returned to normal following a weekend-long train strike. READ  

German dies after trying to take ravine photos
Photo: File photo/Shutterstock

German dies after trying to take ravine photos

A German student has died after falling into a steep ravine at a waterfall on a popular Malaysian resort island, police said on Sunday. READ  

Academic makes Twitter splash saying 'Nein'
File photo. DPA

Academic makes Twitter splash saying 'Nein'

Former Ivy League professor of German Eric Jarosinski has become a Twitter phenomenon developing a huge social media following thanks in no small part to saying no in German. READ  

Klopp slams Dortmund as slump continues
Jurgen Klopp looks downcast as Borussia Dortmund suffer another defeat. Photo: DPA

Klopp slams Dortmund as slump continues

Jurgen Klopp slammed his Borussia Dortmund side after Saturday's 2-1 defeat at Cologne made it five Bundesliga games without a win ahead of Wednesday's Champions League clash at Galatasaray. READ  

Michael Müller will be Berlin's next mayor
Michael Müller. Photo: DPA

Michael Müller will be Berlin's next mayor

Berlin’s development senator, who led the controversial project to develop Tempelhof Airport, will be the capital’s next mayor. Michael Müller won almost 60 percent of the vote among members of the ruling Social Democratic Party (SPD) on Saturday. READ  

Train Strike
Rail strike cripples Germany's train lines
Passengers wait for buses outside Erfurt station on Saturday morning. Photo: DPA

Rail strike cripples Germany's train lines

Rail travellers on Saturday faced huge delays and disruptions on one of autumn's busiest travel weekends as the train drivers' union began a 50-hour strike. READ  

Freed hostages back at German embassy
Stefan Viktor Okonek and Henrike Dielen are welcomed by German Embassy officials upon their arrival at Villamor Airbase in Pasay city, south of Manila, the Philippines. Photo: DPA

Freed hostages back at German embassy

Two Germans kidnapped by Islamic militants in the Philippines are safely back at their Manila embassy, officials said on Saturday after a harrowing six-month ordeal in which they endured threats of beheading and seemingly routine cruelty. READ  

ID cards to be seized to stop jihadist travel
A huge German ID card specimen is exhibited at the booth of the German Federal Printing in 2011. Photo: DPA

ID cards to be seized to stop jihadist travel

Germany on Friday announced new measures to prevent its citizens from travelling to join the jihadist cause in Iraq and Syria, including confiscating their identity papers. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: DPA
Travel
This is the man who has stopped Germany's trains
Photo: Shutterstock
Business & Money
Expats: Should I stay or should I go?
Photo: DPA
Gallery
PHOTOS: World's biggest erotic fair opens in Berlin
Photo: Screenshot
National
German jihadist threatens 'filthy' Merkel
Photo: DPA/Shutterstock
Gallery
11 things Germans are afraid of...
Photo: DPA
Business & Money
Time to loosen the purse strings?
Photo: Shutterstock
Business & Money
Which expat foods do you miss the most?
Sponsored Article
International School on the Rhine: a legacy
Photo: Shutterstock
Business & Money
How to get hired at a Berlin startup
Photo: DPA
Berlin
Ebola 'prankster' shuts down Berlin bar
Photo: DPA
Features
215 countries, 26 years and one engine
Photo: DPA
Society
Leipzig 25 years ago: 'We were scared of being shot'
Photo: DPA
Gallery
What do other countries warn about Germany?
Photo: DPA
Gallery
The ten richest people in Germany
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Sponsored Article
Bilingual education from nursery to graduation at Phorms
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,422
jobs available
Toytown Germany
Germany's English-speaking crowd