Budget balance demands billions more in cuts

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4 Jan, 2013 Updated Fri 4 Jan 2013 10:10 CEST
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The German government is considering increasing spending cuts by up to €6.0 billion euros in 2014 in a bid to balance the government budget, a newspaper reported on Friday.

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



2013/01/04 10:10

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