• 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
The Local List
Eight expat groups to save you in Germany
Photo: Jan Perlich/Munich RFC

Eight expat groups to save you in Germany

Think you're the only English speaker in your town or region? Think again! The Local List this week runs through eight of the best expat groups and clubs in Germany. READ  

Victims of GDR regime get benefit boost
Former GDR political prisoners Hartmut (l) and Gerda Stachowitz in a East Berlin prison which has stood empty for 20 years. Photo: DPA

Victims of GDR regime get benefit boost

Benefit payments to former political prisoners of ex-communist East Germany (GDR) will be raised to send an "important message" 25 years after the fall of the Berlin Wall, the government said on Wednesday. READ  

Cabinet agrees cap on city rent rises
Apartments in Leipzig. Photo: DPA

Cabinet agrees cap on city rent rises

Germany's cabinet agreed on Wednesday to cap ballooning property rents in high-demand urban neighbourhoods in a law set to come into force early next year. READ  

Berlin flights disrupted by WWII bomb find
Passengers are delayed at Tegel Airport. Photo: DPA

Berlin flights disrupted by WWII bomb find

UPDATE: The discovery of a US World War II bomb disrupted flights at Berlin’s Tegel Airport on Wednesday afternoon, with no flights taking off or landing for 30 minutes. The bomb has now been defused but later flights are still delayed. READ  

Refugee abuse guards 'nicknamed the SS'
A photo allegedly showing guards abusing one refugee. Photo: DPA/Police

Refugee abuse guards 'nicknamed the SS'

A group of guards who allegedly abused refugees in an asylum centre in western Germany were nicknamed “the SS” after Hitler's stormtroopers, according to one of their colleagues. Photos of guards abusing refugees have sparked a backlash in Germany against security firms. READ  

Nestle wins the food prize no one wants
First prize went to Nestle for its sugary baby food. Photo: Foodwatch

Nestle wins the food prize no one wants

A food watchdog presented Nestle with a prize to avoid on Wednesday for the cheekiest false advertising of the year. The runner-up was a chicken soup with no chicken in a vote of almost 160,000 Germans. READ  

Merkel's VIP jet set to fly soldiers home
One of the two A340 planes which are reserved for the Chancellor and government leaders. Photo: DPA

Merkel's VIP jet set to fly soldiers home

One of Chancellor Angela Merkel’s VIP jets is set to be used to ferry soldiers home who are stuck in Afghanistan, due to ongoing problems with the German military’s transport planes. READ  

German firms top EU lobbying list
Siemens was the highest ranked German company when it came to spending on EU lobbying, according to the register. Photo: DPA

German firms top EU lobbying list

Germany companies are among the biggest spenders when it comes to EU lobbying to influence decision makers in Brussels. There are more German lobbying organizations registered than from any other country in Europe but Belgium. READ  

City starts beer for alcoholics project
Photo: DPA

City starts beer for alcoholics project

A city in western Germany will start a controversial project on Wednesday to employ alcohol and drug addicts to clean the streets in return for beer, tobacco, food and small amounts of cash. READ  

Fault forces Germany to cut Eurofighters
A German Eurofighter. Photo: DPA

Fault forces Germany to cut Eurofighters

A manufacturing fault has been discovered in the troubled Eurofighter Typhoon warplanes, Germany's defence ministry said on Tuesday, announcing it was suspending deliveries of the sophisticated jets. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Munich
Bavarian independence becomes a reality... (online)
Photo: DPA/Police
National
'Criminals are at work in refugee homes'
Photo: DPA
Business & Money
Immigrants have created how many German jobs?
Photo: DPA
National
Revealed: Germany's military feet of clay
Marks & Spencer
Sponsored Article
Marks and Spencer: Win €300 toward your new autumn wardrobe
Photo: Shutterstock
Society
Quiz: How good is your German?
Photo: DPA
Gallery
Thousands take to Berlin's streets for marathon
Photo: DPA
Society
'Incest should be legal,' says ethics board
Photo: DPA
Gallery
Ten noises that sound very different in German
Photo: DPA
Society
QUIZ: Can you pass the German citizenship test?
Photo: Shutterstock
Gallery
Ten German words you'll never want to hear again
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
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

3,183
jobs available
Toytown Germany
Germany's English-speaking crowd