Berlin 18 –12 –2009
Wolfgang Schäuble, Germany’s finance minister, has warned of a severe fiscal crackdown after the immediate effects of the economic crisis are over, and has said that combating a budget deficit in these times could not be done using old conventional means.
Experts have been sharply critical of the planned tax cut legislation by Germany’s coalition government of conservative CDU and the pro-business FDP.
Mr Schäuble presented his draft 2010 federal budget which predicts a federal deficit of 86 billion Euro. This is somewhat less than had been predicted but almost previous record high of 1996.
The Merkel government faces a severe challenge from 2011 onward because of fiscal rules which it itself had enshrined into the German constitution and will force it to cut spending every year until 2016. [ouch!]
Fighting this deficit will require a great effort the finance minister has said and comes during the government’s declared determination to prepare the public for unpopular spending cuts that could even erode Germany’s generous welfare system.
Hopefully the billions being wasted on a futile Afghani Nato mission with no future,- including paying compensation in millions of Euros for German caused civilian deaths- will recieve as close scrutiny as domestic cost cutting.
It is still not sure if this particular tax package could obtain the majority required in the upper house of parliament in which Germany’s 16 regional ‘Lander’ governments are represented, to become law.
By comparison, Germany’s government finances have not been hit as hard as some of other EU members by the international economic crisis.
Misery loves company, and as a small comfort, Greece provided it.
By comparison the fiscal problems in Greece are even worse than the German ones and the German finance minister has advised Greece to take a hard and difficult line to implement public austerity programs.
Greece has been struggling with a rising public budget deficit that is forecast to reach 13% of GDP for 2009. This is a record for countries in the euro zone and well above the 3% budget deficit limit set by the EU budget rules.
Loading ...
