German cabinet agrees 'balanced' budget in 2014
(03-13 19:22)
Germany's cabinet on Wednesday agreed a draft budget for 2014 said to be the first "structurally balanced'' budget -- excluding one-off items and the effects of the economic cycle -- for 40 years.
The draft foresees a deficit of 6.4 billion euros (HK$64.5 billion) in the total federal budget of 296.9 billion euros 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 six billion euros. Otherwise we would be completely balanced,'' Otto Fricke told Deutschlandfunk radio.
The federal budget deficit amounted to more than 44 billion euros in 2010, when Germany was recovering from one of its worst recessions in decades.
It had dropped to 22.5 billion euros by 2012 and is expected to be 17.1 billion euros 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 (GDP) 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.
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