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German govt to uphold conservative budget policy

Xinhua | Updated: 2018-05-16 23:14
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BERLIN - The new "grand coalition" government remains dedicated to the "black zero" policy of a balanced federal budget, German chancellor and Christian Democratic Union (CDU) leader Angela Merkel told parliamentary delegates on Wednesday.

Speaking during ongoing parliamentary consultations, Merkel expressed the view that it was "anything but natural" for a German government to continuously refrain from contributing to the stock of outstanding public liabilities by issuing new debt. The veteran chancellor highlighted that Germany's debt to gross domestic product (GDP) ratio would fall below the "Maastricht limit" of 60 percent for eurozone members for the first time since 2002 next year.

Merkel described the "black zero" policy as a "path of justice for future generations" in this context. Germany has consistently achieved annual government budget surpluses since the conservative fiscal approach was first adopted by former finance minister Wolfgang Schaeuble (CDU) in 2014.

In sticking to Schaeuble's legacy, the current "grand coalition" wants to limit total public expenditure to 341 billion euros in 2018 and has earmarked 46 billion euros until 2021 for investment in education, housing and high-speed internet. "The finance minister is generous, but he too has to abide by the basic rules of arithmetic," Merkel said.

Opposition politicians from the Left party (Linke), Greens (Gruene) and Free Democratic Party (FDP) have sharply criticized what they view as an excessively cautious investment strategy in light of aging infrastructure in Germany. By contrast, the Alternative for Germany (AfD) parliamentary faction attacked Merkel's fourth cabinet for being too spendthrift on Wednesday.

AfD parliamentary faction leader Alice Weidel accused Berlin of conspiring to portray the public finances in a better state than they actually were. By "throwing money out of the window", the government was allowing the rapid build-up of "shadow debt" which would weigh on the economic prospects of young Germans.

Weidel went on to launch a tirade against "burkas, girls with burkas, publicly-subsidized men with knives and other good-for-nothings", the presence of which she said endangered the German economy and welfare system. The speech was met with widespread derision by other political factions in the federal parliament (Bundestag) and prompted a call to order by Parliamentary President Wolfgang Schaeuble.

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