Germany adopts budget with record debt

Germany adopts budget with record debt
Chancellor Merkel casting her vote for the budget. Photo: DPA
Germany's parliament Friday approved a budget for 2010 with a record level of new borrowing, as Europe's top economy seeks to bounce back from the most severe recession since World War II.

By 313 votes to 256, deputies approved the budget, which foresees €80.2 billion ($108.3 billion) in new debt, twice last year’s borrowing.

Germany’s public deficit this year is set to be double the maximum permitted by the European Union’s fiscal rules, rising to as much as six percent of gross domestic product, from 3.3 percent of GDP in 2009.

Finance Minister Wolfgang Schäuble reiterated his determination to bring Germany’s deficit back under the three percent ceiling by 2013. He said that if Germany failed to adhere to the rules, they would crumble and with them the idea of a single European currency.

The budget must now be approved by the upper house of parliament, the Bundesrat.

In 2009, the German economy contracted by five percent, the worst contraction in over six decades. But Berlin is hoping for growth of 1.4 percent this year.

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