Germany balances budget for first time since 1969
The German government managed to balance its books for the first time since 1969 in 2014 and a year ahead of target, the finance ministry said Tuesday.
Originally, the government had been pencilling in a small budget deficit of 6.5 billion euros ($7.7 billion) for 2014.
But thanks to higher tax revenues and lower interest rate payments on its debt, Berlin has now managed to finish the year without any net new borrowings, achieving Finance Minister Wolfgang Schaeuble’s long-cherished goal of a “black zero” on its accounts ahead of target.
Schaeuble had pledged to achieve that goal in 2015 and for a balanced budget to become the norm for Germany.
Budgetary rigor was one of the issues which the conservatives under Angela Merkel campaigned on in the 2013 elections.
But the opposition parties and many economists believe the “black zero” is being fetishized and actually makes no economic sense because it curbs much-needed investment in growth.
Taking the federal budget as well as the regional state and municipal budgets as well, Europe’s biggest economy already achieved balanced its books in 2012.
In terms of overall debt, Germany is still in breach of the European ceiling of 60 percent of gross domestic product (GDP).
At the end of 2013, the country’s overall debt amounted to 2.15 trillion euros, equivalent to 78 percent of GDP.
Schaeuble hopes to bring the debt ratio down below 60 percent by 2024.