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Business

Public-sector Banks to Help Cut German Deficit

The German government is considering asking publicly owned regional state banks or Landesbanken to repay past subsidies as a way of bringing down the German public deficit, Finance Minister Hans Eichel said in a television interview Friday. The move, which would bring around €1.5 billion ($1.9 billion) into Germany's public coffers, enabling the government to fulfill its pledge to bring the deficit back below 3.0 percent of gross domestic product (GDP) next year, as stipulated by the European Stability and Growth Pact. "This is the essential element to fill the gaps...," Eichel told German public television ARD in an interview to be broadcast on Friday evening. In October, the European Commission in Brussels formally ordered Germany's public sector banks to repay to their regional state governments a total €4.3 billion in subsidies plus interest. The regional state budgets are included in the overall public deficit, which has breached the 3.0-percent rule in both 2002 and 2003 and is expected to do so again this year. (AFP)