BERLIN, Dec 5 — Germany is on track to end 2019 with a big budget surplus, which will shrink sharply next year due to government plans to help families, Handelsblatt newspaper reported yesterday, citing a government document.
This year's public sector surplus from federal, state and local authority funds will dip to €39.5 billion (RM192.7 billion) from €45.3 billion in 2018, according to the document to be presented to a federal and state government budget meeting on December 13.
The surplus will shrink to €4.5 billion in 2020 and further thereafter, Handelsblatt reported, citing plans to partly abolish a “solidarity tax,” introduced after 1990 German reunification, and to ease the financial burden on families.
The budget surplus is a subject of hot debate in Germany.
A new leftist leadership of the Social Democrats (SPD), junior partners in Chancellor Angela Merkel's government, wants to drop Germany's strict fiscal rules on borrowing and its commitment to a balanced budget to pay for increased investment.
This would break a taboo for many conservatives. Even SPD Finance Minister Olaf Scholz, who lost the leadership contest, has so far stuck to fiscal rigour. — Reuters