DW: Merkel cabinet approves 2014 budget

26 June 2013

Germany's centre-right government has drafted its budget for next year envisaging reduced spending, higher revenues and substantially lower debt. For 2015, chancellor Angela Merkel even seeks to carve out a budget surplus.

The centre-right governing coalition of conservative chancellor Angela Merkel, on Wednesday, gave the go-ahead to government expenditures totaling €295.4 billion next year - about €15 billion less than the government in Berlin aims to spend this year.

The reduction will come in spite of a projected revenue increase of €268.7 billion in 2014. This is because German finance minister Wolfgang Schäuble seeks to slash the budget deficit from €25.1 billion this year to just €6.2 billion in 2014. By reducing the budget deficit, Berlin expects to spend €5 billion less on interest paid on its debt. German debt servicing already fell to €30 billion last year, as borrowing costs slumped substantially for the government due to Germany's safe-haven investment status in the eurozone debt crisis.

On Wednesday, Chancellor Angela Merkel's conservative CDU/CSU union, as well as its junior coalition partner, the liberal Free Democrats (FDP), also agreed on a three-year financial plan. The proposal seeks to consolidate the budget further until 2017, envisaging a small surplus of €200 million in 2015 to reach €9.6 billion in 2017. Finance minister Schäuble said that he wanted the surpluses in the years ahead to go primarily towards paying off Germany's more than €2 trillion debt.

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