Minister sees risk from euro, oil, market turbulence

27th November 2007, Comments 0 comments

27 November 2007, Berlin - The German economy faces increased risks from the strong euro, high oil prices and turbulence on financial markets, but is better placed to weather them than before, Finance Minister Peer Steinbrueck told parliament in presenting the 2008 budget Tuesday.

27 November 2007

Berlin - The German economy faces increased risks from the strong euro, high oil prices and turbulence on financial markets, but is better placed to weather them than before, Finance Minister Peer Steinbrueck told parliament in presenting the 2008 budget Tuesday.

Steinbrueck renewed his pledge to balance the budget of the federal government by 2011, sketching a decline in new borrowing from 14.4 billion euros (21.4 billion dollars) this year to 11.9 billion euros next year.

The state budget as a whole - taking into account the federal government, the states, the local authorities and the social insurance funds - was in balance this year for the first time since 1969, Steinbrueck told the Bundestag.

The growing economy had taken 1 million people out of unemployment over the two years since Christian Democrat (CDU) Chancellor Angela Merkel's coalition government took power, Steinbrueck said.

"One million people are profiting directly from the upswing," the Social Democrat (SPD) finance minister said at the start of a four-day debate on the budget.

"We have not reached our goal by a long way, but we have come a lot closer to that goal in the first two years of this grand coalition," he said.

The 2008 federal budget provides for total expenditure of 283.2 billion euros. Provision for investment in public works, mainly rail and roads, has been boosted from previous levels.

The opposition, comprising the three smaller parties, the Left, the liberal FDP and the Greens, accused the government of lack of ambition in cutting borrowing.

A balanced federal budget could have been achieved by next year, the FDP said.

DPA

Subject: German news

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