Berlin to roll out major austerity plan in 2010

21st December 2009, Comments 0 comments

Finance Minister Wolfgang Schaeuble says the government would unveil a savings package by mid-2010 to begin whipping the country's public finances back into shape.

Berlin – The German government will unveil a major savings plan by mid-2010 to put the country back on the road to fiscal health, Finance Minister Wolfgang Schaeuble said in an interview published Monday.

Schaeuble said the government would hammer out a savings package by July to begin whipping the country's public finances back into shape.

"We must reduce the structural deficit from 2011 by around EUR 10 billion per year," he told the Bild daily, referring to an austerity law passed earlier this year.

"That will be tough but we have to do it."

He offered no details as to how he would bring about the savings, after admitting last week he was unsure where to begin cutting.

Massive spending to pull Europe's biggest economy out of its worst post-war recession has ripped a huge hole in the public purse.

Last week, Chancellor Angela Merkel's cabinet approved the 2010 budget, which foresees a record EUR 85.8 billion in new debt next year.

Nevertheless, a disputed EUR-8.5-billion tax relief package by Merkel's new centre-right government cleared its final legislative hurdle despite serious reservations about its impact on the country's tattered public finances.

AFP / Expatica

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