BERLIN (MNI) – German GDP growth will likely be above 3% this year
but will slow next year, Finance Minister Wolfgang Schaeuble said
Tuesday.
“We won’t have a growth rate of above 3% next year, but we have
every chance for sustainable economic development,” Schaeuble said in a
speech in parliament at the first reading of the 2011 budget bill.
Thanks to improved economic trends, federal net new borrowing will
likely amount to only “somewhere between below E60 billion and E50
billion” this year, the minister estimated. Previously, the government
had projected a borrowing need of E65.2 billion.
Schaeuble again defended the government’s budget consolidation
course, arguing that it will bolster consumer confidence and is thus “an
important pre-condition for sustainable growth.”
In other remarks, the minister renewed his call for a strengthening
of the EU Stability and Growth Pact. He also urged to fight moral hazard
risks on financial markets. If investors buy high-yield bonds then they
should also share the higher risks, Schaeuble argued.
“I’m confident that we’ll reach an agreement on that in Europe in
the coming year,” he said.
The minister again underscored the government’s determination to
push for the introduction of a financial transaction tax in Europe. “We
will do everything to achieve this,” he vowed.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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