BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble sees a threat to Germany’s ability to maintain a balanced budget given mounting pressures to increase government spending, the Passauer Neue Presse newspaper reported on Tuesday.
“The budget parameters for the year 2018 and the budget plan through 2021 mark the fourth consecutive time the government has submitted a budget without new debt. But this cannot be taken for granted despite the projected robust economic developments, low interest rates and the migrant reserves created in 2015 and 2016,” it quoted a finance ministry paper as saying.
It said the government’s “expansive spending policies of recent years”, including greater outlays on domestic and external security, development aid, and financial help for local and state governments, were putting increased pressure on the budget, and could threaten Berlin’s “schwarze Null” or balanced budget.
The federal government was also shouldering increased burdens for a variety of social measures and demographic developments, according to the paper prepared for a meeting of Chancellor Angela Merkel’s cabinet, which is due to consider the proposed budget on Wednesday.
A draft finance ministry document seen by Reuters on Friday showed Germany planned to boost spending by 1.9 percent to 335.5 billion euros in 2018, with the extra money going mainly to fund refugee integration, development aid, defence and domestic security.
The cabinet is expected to approve the draft plans in June, but they may be subject to revisions if a new coalition takes power after national elections in September.
Reporting by Andrea Shalal; Editing by Alison Williams