The German government on Wednesday approved plans to balance the country's budget by 2014, two years ahead of schedule, through continued economic growth and lower borrowing.
Berlin, which has been at the forefront of a campaign for stricter budget rules in the eurozone to contain the EU debt crisis, hopes this will set an example for other European states trying to reduce their budget deficits.
German Finance Minister Wolfgang Schaeuble said at a press conference that the government is "far ahead of all requirements. The budget projections reflect the "sound economic and financial policies of this government," he added.
He said Germany's structural deficit would come down from 1 per cent of GDP next year to 0.26 per cent in 2014.
The provisions of the debt brake, which sets strict limits on borrowings, had set to achieve 0.35-per-cent target by 2016.
Schaeuble told reporters that Berlin is implementing "the lessons learned during the financial crisis," and added that it is committed "to follow growth-friendly deficit reduction policies."
Under the budget plan, government spending is projected to total EUR300.7 billion in 2013, before edging up slightly to EUR309.3 billion after three years.
Europe's biggest economy, Germany plans to borrow an additional EUR19.6 billion in 2013 - about EUR5 billion less than it originally planned.
Germany's overall contribution to the European Stability Mechanism (ESM), which is due to begin operating in July, is projected to total EUR22 billion.
by RTT Staff Writer
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