German cabinet approves 2013 budget benchmarks | Business| Economy and finance news from a German perspective | DW | 21.03.2012
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German cabinet approves 2013 budget benchmarks

The German government has endorsed Finance Minister Wolfgang Schäuble's 2013 federal budget benchmarks. The cabinet also approved his plans to aim for an almost balanced budget by 2016.

Chancellor Angela Merkel's cabinet on Wednesday approved the central pillars of the 2013 federal budget as proposed by Finance Minister Wolfgang Schäuble.

His scheme eyes a faster reduction of the country's public debt than was originally planned. Next year, fresh borrowing is to be kept down to 19.6 billion euros ($25 billion), against expenditure of 300.7 billion euros.

The biggest single budget item in 2013 will be that for labor and social affairs at 119.2 billion euros with the bulk of resources to go towards bolstering the country's public pension fund.

Next in line is debt servicing as Germany will have to pay a staggering 36.5 billion euros in interest for the over one trillion euros in debt accumulated over the past decades.

Impeding rescue fund liabilities

In the current year the government needs to borrow 34.8 billion euros, with spending set to total 312.7 billion euros.

The cabinet also approved a supplementary budget for 2012, which includes special payments worth 8.7 billion euros for the new permanent eurozone rescue fund, the European Stability Mechanism (ESM).

The German Finance Minister said he was sticking to his long-term goal of reaching a near-balanced budget by 2016 when he foresees fresh borrowing to be down to just one billion euros. New borrowing was last at that level in 1969.

hg / mll (dpa, Reuters, dapd)