Germany's top two parties vowed today to tackle the country's soaring budget deficit but still appeared at odds over how to go about it ahead of talks next week to thrash out a coalition government programme.
The conservatives (CDU/CSU) said bringing Germany back in line with European Union budgetary rules would be a top priority in the talks due to start on Monday, a sentiment echoed by the Social Democrats (SPD) designated finance minister.
But the SPD has resisted calls by the Christian Democrats (CDU), including its General Secretary Volker Kauder on Friday, for a supplementary 2005 budget to clarify the extent of overspending this year. "We don't need any audit. We know the budget situation is problematic," designated SPD finance minister Peer Steinbrueck told WDR radio.
Outgoing German Finance Minister Hans Eichel had planned to hold new federal borrowing this year to &8364;22 billion, but has since admitted the government faces an additional shortfall of at least &8364;12 billion.
This means Germany is likely to break the European Union's three percent of gross domestic product (GDP) limit on budget deficits for a fourth year in a row, given additional overshoots in state budgets.
Mr Eichel had planned to plug the additional gap in the federal budget by activating undrawn credits from previous years' budgets, which amount to some &8364;19 billion, thereby avoiding the need to present a supplementary budget.