German finance minister, Mr Hans Eichel, received a boost yesterday when a court ruled he does not have to split the €50.8 billion third generation telcoms licence auction proceeds with the 16 federal states.

Three conservative-ruled states took the government to court, believing they were entitled to a slice of the pie. However Germany's highest court, the Constitutional court in Karlsruhe, threw out their claim yesterday. The court ruled that the federal government should keep the proceeds as it alone is responsible for telecommunications. By using the 3G proceeds to service the national debt, the government said it was saving €2.5 billion a year in interest payments. A ruling to share the proceeds would have been disastrous for Mr Eichel. He has promised the European Commission to reduce Germany's national debt, expected to be around 2.6 per cent of GDP this year.