BERLIN (MNI) – German Economics Minister Rainer Bruederle warned in
a newspaper interview published Monday not to endanger the German
economy by cutting expenditures.
“We need to be careful about everything that supports growth,”
Bruederle told German business daily Financial Times Deutschland (FTD).
“We must not destroy ourselves through consolidation,” he warned.
The government should not focus too much on cutting expenditures
but should also keep the competitiveness of the country in mind, the
He again rejected calls for tax hikes to consolidate public
budgets. “Tax hikes are definitely the wrong way to go,” he reckoned.
“We [would] only reduce domestic demand further.”
Finance Minister Wolfgang Schaeuble said in a newspaper interview
over the weekend that it would be a difficult task for the federal
government to meet the country’s debt limitation rules, “but it is also
not impossible.” He did not rule out the abolition of some tax
subsidies, in addition to spending cuts.
The German debt limitation rule stipulates that the structural
deficit of the federal budget must be no more than 0.35% of GDP starting
in 2016. From 2011 until 2016, the federal net new borrowing must be
gradually brought in line with that ratio.
The structural deficit limit of the 16 states is set at 0.0% of GDP
starting in 2020. From 2011 until 2020 the states must gradually lower
their structural deficits to zero.
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