* http://www.bundesregierung.de/nn_6538/Content/EN/Artikel/2007/07/2007-07-04-bundeshaushalt-rahmenartikel__en.html
2008 Budget: Inter-generational justice, growth and future orientation* The budget consolidation course taken by the German government in 2006 is beginning to take effect. The continuing economic upswing offers a chance to capitalise further on the success of this policy. As of 2011 the national budget is expected to require no further new debts. In 2008 net borrowing is to be reduced to 12.9 billion euros 35 percent less than in 2007. This brings the figure down to the pre-reunification level. At 4.6 percent, the percentage of total public spending accounted for by the net borrowing of the federal government is the lowest since 1973. The stable, broad-based economic recovery must be fully utilised to build on the successes of the previous years. Both net borrowing and the structural deficit of the national budget will be gradually reduced. About 60 percent of the additional tax revenue generated between 2008 and 2011 (i.e. 54 billion of the total of 90 billion euros) will be used to this end. "We can break even!" In 2011 the national budget is to be balanced without any new borrowing. After forty years of increasing national debt, this will mark a radical turn-around, which will benefit the generations to come. "We have the historic opportunity now to put our house in order thanks to the favourable financial climate," declared Federal Minister of Finance Peer Steinbrück confidently, when he presented the budget. The draft budget for 2008 and the financial plan for the period up to 2011 offer ideal preconditions. "We can break even if we stick to this path," claimed Steinbrück. Budget deficit successfully tackled The European Union supports the financial course steered by the German government. The German budget deficit has been reduced credibly and sustainably. By 2010 the national budget will be structurally balanced. According to the so-called Maastricht criteria, the deficit will then be zero percent. For 2011, a surplus is expected. This is the result of the vigorous financial development at federal state and communal levels, which has been even more robust than the recovery at national level. Financial policy for the future In spite of the tight reins on spending, sectors vital for the future of the country will continue to receive targeted support. This applies firstly to the 25 million euros impetus programme for growth and employment. Secondly, the German government is setting additional priorities with its 2008 budget. These will be worth 2.5 billion euros a year and will benefit sectors crucial to the future of Germany as well as those sectors in which Germany's international economic weight has increased. The budget for development assistance is to grow by 750 million euros every year. To this sum will be added another 120 million euros generated by the sale of emission reduction certificates. In the years to come, this will mean that an additional 3 billion euros are available for German development cooperation. The decisions taken at the G8 summit in Heiligendamm, under the German Presidency, point the way forward in this regard. Thus, within the scope of development assistance for African states, efforts will be stepped up to stem the spread of life-threatening diseases such as HIV/AIDS, malaria and tuberculosis. Another 220 million euros will be available as of 2008 for research and development. In this way the German government is doing its bit to raise spending on research and development to 3 percent of the country's gross domestic product (GDP) by 2010. Investments will also be made in training the next generations. The German government will raise the funds available for student loans to 1.242 billion euros every year. In the medium term that will mean an additional 300 million euros a year. Financial scope left in the budget is to be used in no small way to reduce CO2 emissions, because climate policy too is policy for the future. Sharing the costs of promoting employment more equitably The Federal Employment Agency (BA) is, for the first time, to bear some of the costs of getting the unemployed back to work and of the administrative costs involved. In future, the BA will bear 50 percent of these costs, which translates as about 5 billion euros. This new provision is intended to help prevent long-term unemployment by ensuring that measures are taken at an early stage to reintegrate job-seekers into the labour market. As of budget year 2008, the BA will also pay the contributions for time taken off work by parents to bring up their children at home. This too is fully in line with the excellent income situation of the Federal Employment Agency. The total spending estimated in the 2008 budget is of the order of 283.2billion euros. The buoyant economic development is reflected in the expected tax revenues, which are put at 237.1 billion euros. All in all, spending will rise by some 4.7 percent as compared to 2007. Without the one-off and special expenditure items, the increase would be only some 1.9 percent. In addition to increased spending on development assistance, research, education and internal and external security, higher interest payments will push up spending. This is the result of rising interest rates and other special factors which will burden the budget. In 2008 investment should stabilise at 24.3 billion euros. [Non-text portions of this message have been removed] *************************************************************************** Berdikusi dg Santun & Elegan, dg Semangat Persahabatan. 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