Books balanced, a year early
January 12, 2015
Finance Minister Wolfgang Schäuble on Monday became the first since 1969 to preside over a federal German budget with no new debts, even though he was officially planning to reach the milestone in 2015.
Low interest rates on outstanding German national debt, coupled with bumper tax revenues fuelled by high levels of employment in the country, meant that the German government recouped as much as it spent in 2014.
Fresh government debts of around 6.5 billion euros ($7.66 billion) were initially earmarked for 2014 to cover projected expenditure of around 300 billion euros. Record tax revenues for the year - totaling 278 billion euros, around 10 billion higher than in 2013 - played a key part in covering government spending. Low interest rates on German national debt, currently at 0.4 percent for 10-year bonds, also kept spending in check.
Finance Minister Schäuble had insisted upon a "black zero," as it's commonly called in German politics and the press, for the 2015 budget, despite criticism from many rival politicians, who argue that Germany can afford to invest more in infrastructure and other projects.
Since 1969, German governments of all stripes had racked up more than 1,300 billion euros in new debts, taking on at least some extra loans every year.
msh/hg (dpa, Reuters)