adminThe draft foresees a deficit of €6,4 billion in the total federal budget of €296,9 billion next year.
In 2015, the books would be balanced entirely, according to the draft.
The budgetary spokesman for the Free Democrats, junior partner in Chancellor Angela Merkel’s government, said it was “the first time in 40 years that a government had put forward a structurally “balanced budget.”
There would still be “a few one-off items amounting to €6 billion. Otherwise we would be completely balanced,” Otto Fricke told Deutschlandfunk radio.
The federal budget deficit amounted to more than €44 billion in 2010, when Germany was recovering from one of its worst recessions in decades.
It had dropped to €22,5 billion by 2012 and is expected to be €17,1 billion in 2013.
The budget comprises just spending at a federal level. The wider public deficit, also including regional and local administrations, is used to calculate whether countries are abiding by European rules.
In 2012, Germany registered a surplus of 0,1 percent of total gross domestic product on this measure, according to a provisional figure published in mid-January.
European Union rules state countries in the eurozone may not run a public deficit higher than three percent of GDP, and are supposed to work towards a balance, and even a surplus in times of economic growth.
Meanwhile, Germany’s finance minister yesterday voiced confidence that France would stick to European Union rules on public deficits after French President Francois Hollande acknowledged that Paris would exceed EU limits.
Wolfgang Schaeuble told reporters he was “sure that France would, like us, respect the rules” that limit EU countries’ public deficits to no more than three percent of gross domestic product .
On Tuesday, Hollande publicly scrapped his government’s goal of cutting the deficit to the three-percent ceiling, saying that it would probably amount to 3,7 percent of GDP.
The European Commission has indicated that it may give France some slack in achieving the deficit target, and the International Monetary Fund has recently warned EU countries that cutting deficits too fast was harming growth, a position that France supports.
“We have full confidence in France and the European Commission,” Schaeuble insisted.
He emphasised the importance of sticking to the rules and said there was “no doubt” that Paris, as well as Berlin, would fulfil its responsibilities in this respect.
“We don’t need to give each other mutual advice in public,” said Schaeuble.
The German government yesterday approved a draft 2014 budget with the lowest deficit in 40 years, hailed by the economy minister as a “historic” step in the battle against debt.
The structural federal budget — excluding one-off items and the effects of the economic cycle — would be balanced in 2014, the finance ministry said. — AFP.
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