Germany eyes balanced federal budget in 2014
BERIL - Agence France-Presse
German Chancellor Angela Merkel (C) chats with Minister of Labour Ursula von der Leyen (L) and Finance Minister Schaeuble at the Bundestag. EPA photoGermany is set to balance its federal budget by 2014, Finance Minister Wolfgang Schaeuble said yesterday, as Berlin urges other countries to slash deficits as a response to the eurozone debt crisis.
In an opinion article for the Tagesspiegel am Sonntag, Schaeuble wrote: “Germany will already this year lower its deficit to below 0.5 percent of GDP and from 2014 have a balanced budget again.” “Reducing debt is one of the most important political tasks both in Germany and in many other countries. The German people are rightly demanding this with great force,” added the minister.
The deficit would be “nearly balanced” already in 2013, Schaeuble pledged. Germany has previously committed to balancing its budget by 2016.
Led by Germany, the eurozone has embarked on a program of slashing deficits as a response to the three-year debt crisis that has tipped many of the 17-nation bloc into crippling recessions.
Schaeuble noted that 25 of the 27 European Union countries had signed up to a “fiscal compact” that sets limits on new spending, with fines for nations that do not comply.
Only Britain and the Czech Republic refused to sign up to the Germany-inspired treaty that Chancellor Angela Merkel believes is the only way for the eurozone to escape its deep malaise. Last year, the German public deficit stood at one percent of output, still well below the three-percent ceiling imposed by the European Union.
Germany has come under fire for concentrating too hard on reducing its deficit and not enough on promoting growth that could help its eurozone trading partners.
DIVORCE TO 'KILL THE KIDS'
WARSAW – Agence France-Presse
The debt-ravaged eurozone is in trouble but every effort must be made to keep this currency marriage intact because a divorce would end up “killing the kids,” Poland’s central bank (NBP) chief Marek Belka have said.
“So we might say: let’s just forget about the euro, let it fall apart. If it was all just a huge mistake, let’s fix that. This is of course nonsense, because it assumes you can turn back the clock. You can’t do that, but you have to bear the consequences,” the former director of the International Monetary Fund’s European department told Poland’s TVN CNBC financial news channel on Oct. 26.
“Putting it bluntly, when you’re getting divorced and you’ve got children, too bad, but you can’t kill the kids,” added the one-time Polish finance minister.