German tax revenues in 2002 are likely to be €18 billion lower than predicted in May, business daily Handelsblattreported today.
The shortfall in 2003 is likely to be similar, the newspaper reported ahead of a meeting next Tuesday and Wednesday of a government-appointed commission to draw up new tax-revenue estimates for the government's budget planning.
German finance minister Mr Hans Eichel has pledged to push the deficit back below 3 per cent in 2003 to avoid EU fines under the Stability and Growth Pact, which is designed to ensure fiscal discipline among member states to shield the euro from inflation.
Germany's new centre-left government, re-elected with a reduced majority in September, has drawn up a list of spending cuts and tax increases for next year.
It is also raising pensions contributions to 19.5 per cent of gross pay from 19.1 per cent to prevent a cash shortfall in the pension system, a move heavily criticised because it will make labour even more expensive and deter firms from recruiting.
Unemployment rose 22,000 to 4.119 million in October on a seasonally adjusted basis, and the Federal Labour Office yesterday predicted a further increase next year.
Mr Eichel said in a newspaper interview he did not want to increase value-added-tax from the current level of 16 per cent to raise revenues.