Germany closes budget deficit one year early

Tim Wallace
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ANGELA Merkel successfully eliminated Germany’s budget deficit in 2014, new figures showed yesterday, hitting the target a year ahead of plans.

It is the first time the books have been balanced since 1969, and demonstrates the strength of the government and the economy in overcoming a challenge which haunts much of Europe.

The country has grown more strongly than many of its struggling Eurozone peers, helping it increase tax revenues to balance the books.

Angela Merkel has praised other Eurozone nations when they have worked to reduce their own fiscal deficits.

But they instead have called on Germany to increase its own government spending in the hope that they can get a boost for their own economies if Germany borrows and spends more.

Another factor helping Germany has been ultra-low interest rates, pushing down the cost of servicing its debts.

The government’s 10-year borrowing costs currently stand at just 0.48 per cent. That could fall even lower if the European Central Bank embarks on a major bond-buying exercise this month.

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