German cabinet approves plan to balance budget by 2011
The German cabinet on Wednesday approved the 2008-2011 budget plan that was aimed to cut government borrowing and balance the federal budget by 2011 amid a continuing economic boom.
According to the new fiscal plan, German government's net new borrowing in 2008 would drop to €12.9 billion ($17.6 billion), well below a previously planned €21.5 billion ($29.2 billion). Net new borrowing for the next four years is also expected to drop to €29.4 billion from €83.5 billion ($113.5 billion) envisaged a year ago. German Finance Minister Peer Steinbrueck said the current economic boom is expected to carry over into the coming years and the government plans to make use of the expected increase in tax revenue to gradually balance the budget over the next four years. He said that the 2008-2011 tax revenues are expected to increase by €91.7 billion ($124.7 billion) when compared to estimates a year ago.
The German economy grew 2.8% last year and is expected to grow by a similar rate this year and next year. (people.com.cn)
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