Wednesday, January 14, 2009

Germany can not cope with EU requirements on budget deficits.

The budget deficit will exceed Germany in 2010, four per cent of GDP. This means under the Stability Pact and the economic growth of the EU, said Minister of Finance Peer Steinbrueck (Peer Steinbrueck). That was reported by AFP.
In doing so, Steinbrueck stressed that the 2009 budget deficit in the country may not be higher than normal. Under the Covenant, the members of the eurozone budget expenditures can not exceed 3 percent of GDP, and the national debt - 60 percent.
According to EU rules, a country that violates the rules, gets a warning requirement in the shortest possible time to return to normal budgetary policies. If this happens, it will be penalized. But in December the European Commission has pledged not to impose sanctions because of the extreme conditions in the European economy caused by the global financial crisis.
The main reason for the growth deficit of 0.1 percent in 2008, the plan will stimulate the economy, which was announced January 13, German Chancellor Angela Merkel. The total amount of the plan of 50 billion euros, and this will be the most large-scale program of state since 1945. In particular, the 17-18 billion euros from it will go to investments in roads and schools, and another nine billion - on tax cuts to corporations and chastnikam.
Previously, it was reported that France would violate the economic rules of the EU in 2009, the second time in the past seven years. In a crisis, many countries are forced to increase spending budget, to limit damage to the economy.
In parallel, the Federal Bureau of Statistics of Germany announced a reduction in GDP growth in 2008 to 1.3 per cent (in 2007-m - 2,5 percent), reported Bloomberg. In 2009, according to the forecast chapter Bundesbank Axel Weber, the economy will start declining, which could have a significant 0.8 per cent. GDP will decline due to a sharp drop in demand for German products abroad.

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