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Budget balance demands billions more in cuts
Photo: DPA

Budget balance demands billions more in cuts

Published: 04 Jan 2013 10:10 GMT+01:00
Updated: 04 Jan 2013 10:10 GMT+01:00

The regional daily Rheinische Post quoted the deputy chief of the conservative CDU party, Michael Meister, as saying: "If we want to reach the so-called structural zero in 2014, we must close a gap of around €5.0 billion.

"That can only be achieved by spending cuts," Meister added.

The structural deficit is the government's financial shortfall after adjustment for cyclical factors.

Already in December, Finance Minister Wolfgang Schäuble said Germany planned to balance the overall state budget -- which on top of the government budget also includes the regional state and municipal budgets -- as early as 2012 rather than in 2014 as previously envisaged.

And in those projections, the government budget would still be in deficit in 2014, to the tune of around €5.0 billion.

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

AFP/The Local/hc

The Local (news@thelocal.de)

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Your comments about this article

10:55 January 4, 2013 by Tonne
So on the one hand spending cuts are required to reduce the deficit and on the other taxation is being reduced because of a surplus? Is there an election in the offing?
14:26 January 4, 2013 by smart2012
Tonne, cannot agree more
10:06 January 5, 2013 by Englishted
I know lets cut the tax for the better off and give ourselves a inflation busting pay rise ,see if the suckers notice.

We can call it austerity that always works .
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