Germany unveils record debt budget
By Daniel at 16 December, 2009, 10:10 pm
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BERLIN : Germany’s new centre-right government unveiled on Wednesday a 2010 budget that forecasts record debt and a 10.5 percent rise in spending.
German authorities planned to borrow an additional 85.8 billion euros (125 billion dollars), Finance Minister Wolfgang Schaeuble said, to ensure Europe’s biggest economy continues to grow after suffering its worst post-war recession.
Another 14 billion euros would be attributed to special items, such as support for the banking sector, bringing total debt to around 100 billion euros.
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“We must reduce the budget deficit starting in 2011,” Schaeuble said.
“How that will happen exactly, I cannot yet say.”
“This will require great efforts,” the finance minister said.
“It won’t be easy” and it will result in potentially unpopular decisions, Schaeuble warned as he asked lawmakers to support the government in getting to grips with the situation.
Germany’s public debt is forecast to reach around three percent of GDP this year, the limit for eurozone countries under the European Union’s Stability and Growth Pact.
Schaeuble has already estimated it would reach at least five percent in 2010 however.
AFP /ls
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