BERLIN (MNI) – The German Labor Agency said on Friday that it now
expects a deficit of only E9.8 billion this year, some E10 billion below
previous projections.
This means that the Labor Agency will need a subsidy of only E6.9
billion from the federal government this year instead of more than E16
billion as initially estimated, it said, noting that the rest of the
shortfall will be covered by exhausting remaining internal reserves.
Lower-than-expected unemployment this year led to the decline of
the deficit, the Agency explained.
The development of the Labor Agency’s deficit is important for
Germany’s overall budget performance. The balances of social insurance
funds, together with budgets for the federal, state and local
governments, make up the total public sector budget against which
compliance with the EU’s Stability and Growth Pact is measured.
–Berlin bureau: +49-30-22620580; email: twidder@marketnews.com
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