Germany Plans to Cut 6 billion to Reach a Balanced Budget

Germany plans further spending cuts worth up to 6 billion euros ($7.9 billion)in order to achieve its target of a structurally balanced budget in 2014, a newspaper said on Friday, quoting finance ministry sources.

Chancellor Angela Merkel’s center-right coalition, which faces an election in the autumn, has championed the cause of budget discipline to overcome the euro zone’s sovereign debt crisis and aims to balance its own books next year, two years earlier than a previous target.

The Rheinische Post daily said Finance Minister Wolfgang Schaeuble would seek savings of 5-to-6 billion euros in addition to spending cuts already planned.

“If we want to reach a so-called structurally balanced budget in 2014 we have to close a gap of around 5 billion euros,” the paper quoted a senior member of Merkel’s Christian Democrats (CDU), Michael Meister, as saying.

“This will come about only through spending cuts,” he added making clear tax increases were not on the agenda.

The paper said the axe would fall across all ministries and would also affect subsidies for the health care system.

via CNBC

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