| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : EU Economy Last Updated: Sep 11, 2014 - 9:35 AM


Germany targets 2015 budget surplus; May support euro investment plan
By Michael Hennigan, Finfacts founder and editor
Sep 10, 2014 - 5:21 AM

Email this article
 Printer friendly page

Germany is targeting the first planned annual budget surplus in forty-five years for 2015 while a Franco-German investment plan for euro area investments valued at €300bn and financed by lending from the European Investment Bank, is reported to be in the works.

Deutsche Welle reports that Wolfgang Schäuble's first budget proposal for 2015 foresees total federal spending just shy of €300bn - - a figure below predicted government revenues. It's Germany's first budget since 1969 that does not forecast any need for new sovereign debts. Thanks to rising tax revenues and rock-bottom interest rates, Germany now also expects a budget surplus for 2014, but this was not initially predicted.

Dr. Schäuble, Germany's finance minister, told the Bundestag on Tuesday that calls “for the use of more and more public money and the acceptance of higher deficits and debts is leading us astray.”

“Growth and jobs don’t come about via higher deficits as if that were the case we [in Europe] really wouldn’t have any problems at the moment,” he added. “Only innovation, structural reforms, investment and reliable [investment] conditions and, above all, trust in the sustainability [of public finances] will help.”

The finance minister said federal budgets without new borrowing to 2015, from next year, become the norm. "We have promised before the election, we have agreed to it after the election, and now we realize it."

"The 'black zero' is not an end in itself, but it stands for reliability; it is sure that we deliver what we have promised. The only way we can maintain confidence in the business location Germany. We have had to laboriously work out again this trust in the last few years. Finally, the global financial and economic crisis has also set Germany economically back. It has already been forgotten that in 2009 we had a decrease in our domestic income of about 5%. The 2015 federal budget and the budget until 2018 stand for reliability. This reliability is elementary for investors as for consumers. Our policy is for stability, especially in a period of economic and political tensions because of military conflicts in the Ukraine and in the Middle East."

The Handelsblatt newspaper reports that Alfred Boss, an economist at the Kiel economics institute says that without additional austerity measures in Budget 2015 there will be a  deficit of about €3.5bn.

Deutsche Welle reports that Peter Bofinger, one of the German government's special panel of economic "wise men," criticised Schäuble's debt-free spending plans. He told the Saarbrücker Zeitung that the "black zero" sought by Berlin "suggests zero competence" in economic policy.

"Even while sticking to the 'debt brake' now within Germany's Basic Law, the state could have invested an extra €10bn per year," Bofinger said. German law was recently changed to incorporate a limit to annual government debt intake; the country's national debt stands at over €2.1tn, around two-thirds of annual GDP.

DW says that according to a report in Tuesday's Passauer Neue Presse newspaper, Schäuble is also planning to abolish Germany's so-called "solidarity surcharge" (Solidaritätszuschlag in German), but to counterbalance this with additional direct taxation. The Solidaritätszuschlag, or "Soli" in common parlance, was introduced in 1991 - primarily labeled as a tax to cover the costs of development in former Communist East Germany after reunification.

Meanwhile, Bloomberg News reports that Germany and France are poised to take the first step toward a European investment program, as the euro area’s two biggest economies seek to resolve differences and spur growth without resorting to stimulus spending, government officials said.

The proposals, which depend on the European Investment Bank providing loans to companies, aim to underpin a €300bn investment plan outlined in July, according to three euro-area government officials who asked not to be named because the document is in draft form. "Germany and France plan to present the initiative at a meeting of European finance ministers in Milan, Italy on September 12."

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Spain's strong recovery to slow in the next few years
Italy's Mezzogiorno is Achilles' heel of Euro Area - lowest birth rate since 1862
Euro Area GDP grows at weak 0.3% in Q2 2015
German GDP up 0.4% in Q2 2015; France's GDP stagnates
Germany's Surplus: Lots of critics; Credible solutions scarce
Euro Area industrial production dips in June and May after a flat April
Greece faces two years of recession according to EU officials
High EU youth unemployment rate not as bad as it seems
Eurozone retail PMI surges to highest since January 2011
ECB monetary policy still tight for Southern Europe
German exports fell in June — surplus at record; Exports up 13.7% year-on-year
Eurozone manufacturing sector continued to expand in July
Weak euro unlikely to have significant impact on Euro Area growth
Is Euro Area Ireland's top trading partner?: EU28 is overwhelmingly UK's
German car firms boost exports from Spain, UK, Portugal, Czech Republic, Slovakia, Hungary and Romania
Flash Eurozone manufacturing/ services PMI close to four-year high despite Greek crisis
Krugman calls euro a Roach Motel; Hotel California gets 1-star grade
Greece & Euro Crisis: July 2015 articles from Finfacts
Greece and other poor countries in Euro Area will not become rich
Euro Area manufacturing/ services PMI hits four-year high in June
Western European car market: Recovery continues
Greece could become a failed state like Venezuela
Multinational companies pay on average 30% less tax than domestic competitors in EU
EU's list of 30 tax havens omits the biggest 4 in Europe
China to invest in Juncker's European investment fund
Greek talks collapse; Game theorists gambling with future — Germany's vice-chancellor
German exports and industrial production in strong rises in April
Tackling Inequality: Scandinavian countries have the most successful welfare systems in Europe
Eurozone unemployment fell by 130,000 in April 2015 — down 849,000 in 12 months
Eurozone service sector business activity slowed during May
German 2015 GDP forecast cut; Jobless level at 24-year low
Eurozone manufacturing in modest acceleration in May
FDI into Europe at record in 2014; UK on top: Germany location for future investment
Eurozone economy loses growth momentum; Jobs growth rises
Athens leak suggests Juncker has plan for Greece
Draghi will not end QE early but warns of risks
Eurozone grows faster than US and UK in Q1 2015
German GDP at slower pace, France faster in Q1 2015
Germany may cut income tax; Germans still shun risky investments
Germany had record exports and imports in March 2015