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Bundestag Committee 'Tweaks' 2013 Budget Figures

by Ulrika Lomas,, Brussels

22 November 2012

The budget committee of the German Bundestag, or lower house of parliament, has recently concluded its deliberations on the country’s 2013 budget.

According to the German finance ministry, the budget committee’s figures concur with government estimations that the ceiling for structural new debt in Germany will be met three years earlier than provided for within the framework of the debt brake rule, confirming that the coalition government’s growth-orientated consolidation course is being consistently pursued.

Enshrined in basic law, Germany’s debt brake rule provides for a permanent ceiling for structural borrowing of 0.35% of gross domestic product (GDP) from 2016. The country’s 2013 budget now provides for structural new debt of around 0.34% of GDP next year.

The budget committee decided that net new debt in Germany is expected to stand at EUR17.1bn (USD21.9bn) in 2013, EUR1.7bn below the figure agreed by the federal cabinet back in June 2012. The government’s 2013 bill provided for net borrowing next year of EUR18.8bn.

The committee’s decision to lower the net borrowing figure by EUR1.7bn is attributable to slightly higher tax revenues and to certain expenditure savings, despite the fact that additional expenditure-based measures were implemented during the course of the parliamentary debate.

It was agreed during the budget committee discussions to increase investment in infrastructure and to amend the method of calculating basic security in old age and in the case of reduced earnings, as required under the terms of the fiscal compact. This measure will also place an additional financial burden on the state.

The budget committee agreed on fiscal revenues for next year of EUR260.6bn, up EUR0.8bn on the government’s June forecast of EUR259.8bn, provided for in the draft budget. The committee also agreed on expenditure for next year of a predicted EUR302bn, down EUR0.2bn compared with the government’s anticipated spending figure of EUR302.2bn, provided for in its 2013 budget bill.

The Bundestag is due to begin its examination of the 2013 budget shortly, on the basis of the new data, in a second and third reading in plenary session.

TAGS: tax | law | gross domestic product (GDP) | budget | Germany

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