BERLIN (MNI) – German federal net new borrowing this year will
likely amount to “just above E65 billion,” markedly below the E80.2
billion envisaged in the 2010 budget, German Finance Minister Wolfgang
Schaeuble said Wednesday.

The fiscal news “is better than feared,” Schaeuble said in a speech
at a conference here. He pointed to better tax revenue developments,
lower unemployment-related spending and one-off proceeds from the
auction of UMTS frequencies.

Looking ahead, the Minister said Germany will not be able to solve
its problem of elevated public debt solely by banking on stronger
economic growth. “We must go down the path of reducing deficits,” he

He reminded that the government this week agreed on a mix of
spending cuts, higher fees and some tax hikes worth E13.2 billion in
2011, E19.1 billion in 2012, E24.7 billion in 2013 and E26.6 billion in
2014. The government has said it aims to cut the budget by an additional
E5.6 billion in 2014.

Schaeuble once again praised the importance of the single European
currency for Germany. “We have a joint interest in a strong euro,” he

–Berlin bureau: +49-30-22 62 05 80; email:

[TOPICS: MT$$$$,M$G$$$,M$X$$$,MGX$$$,MFX$$$,MFGBU$]