BERLIN: Germany will take on slightly less new debt this year than planned, Finance Minister Wolfgang Schaeuble said in an interview.
Tax revenue rose by a higher-than-expected 3.5 percent on the year in the first half of 2013, as the income tax take increased thanks to a robust labour market and rising wages.
Chancellor Angela Merkel’s government aims to use higher revenue to achieve a balanced budget in 2014 for the first time in decades.
“There isn’t very much room for manoeuvre this year, but we will certainly not exceed the budgetary provisions including the supplementary budget and the fund for flood victims — rather we’ll undershoot it a bit,” Schaeuble said in advance text of an interview due to be aired on German radio today.
The worst floods in a decade swept through southern and eastern Germany in June. The government has said it will take on around ¤25bn of new debt this year, including 8 billion for its flood aid fund.
Schaeuble said the government was always cautious in its estimate and at the end of each year found it had always taken on less new debt than planned.
He said there was also little scope for reducing taxes if Merkel’s conservatives, of which he is a member, win a national election on September 22. REUTERS
