Berlin Budget Deficit Much Lower than Expected

Austerity is the name of the game in Germany these days. Earlier this month, Chancellor Angela Merkel's government put together an €80 billion austerity program designed to trim the country's budget deficit substantially in coming years. Additionally, Berlin has been keeping a close eye on spending patterns in countries like Spain and Greece, which investors have decided are on shaky ground.

Now, though, it appears that German finances aren't quite as red as first thought. Whereas initial government projections foresaw the need to take on a whopping €80.2 billion in additional debt this year, new data indicates the real number could be up to €20 billion lower.

According to the Süddeutsche Zeitung on Tuesday, higher-than-expected tax revenues and lower-than-expected unemployment have resulted in a new forecast which foresees the 2010 budget deficit coming in at between €60 billion and €65 billion. Government sales of mobile phone frequencies also improved the bottom line.

Citing unnamed government sources, the paper also reported that the trend is likely to continue into 2011, resulting in new debt of €55 billion instead of a planned €72 billion.


Continue reading at http://www.spiegel.de/international/business/0,1518,702114,00.html