Germany could respect European Union budget deficit rules again in 2007 if it made a big effort to cut tax subsidies, Finance Minister Hans Eichel said today in a statement on his draft 2006 budget.
"We could be in a position to again respect the Stability Pact in 2007 - the decisive
German Finance Minister Hans Eichel
year under the reformed pact - with a really big effort to cut subsidies," Mr Eichel said in the written statement.
Germany's total public sector deficit - the combination of shortfalls in federal, regional and local government - has now exceeded the EU's limit of three percent of gross domestic product (GDP) for three years in a row.
According to recent finance ministry projections, it will continue to exceed that level until at least 2008. Mr Eichel told German television earlier today that the 2006 deficit was likely to be around 3.4 per cent.