adminslashing this year’s projected budget deficit to 1,5 percent from 2,5 percent.
As eurozone partners work on ever tighter austerity plans to balance their books, Germany leads the pack in the strength of its finances – it had a 2010 deficit of 3,3 percent, just above the EU ceiling of
3,0 percent despite having spent heavily on stimulus programmes to offset the worst recession since 1945.
“The positive development this year will continue until 2015, which will allow us to balance the accounts in 2014,” the ministry said in a monthly report published on its Internet site. Germany previously aimed to balance its finances by 2016 under a law requiring the government to ensure that it does not overspend.
The public deficit – the shortfall between revenues and spending – includes regional state budgets along with those of municipalities and the national social security system. Under the terms of the EU’s Stability and Growth Pact, governments are not supposed to exceed a public deficit of 3,0 percent of Gross Domestic Product and must work towards a balance or even surplus in times of economic growth. Total accumulated debt, meanwhile, “will fall between now and the end of the year to 80 percent of GDP and will thus be about three percentage points lower than in the previous year,” the ministry’s report said.
In 2015, Germany forecasts public debt equivalent to 71 percent of GDP, down from 2010’s 83.2 percent – still well above the EU limit of 60 percent but positive compared with, for example, Italy’s 120 percent. – AFP.
Online Reporter