Missing billions blow Germany's EMU target off course
The shortfall is the result of slower than expected economic growth in the first half of the year, and, consequently, larger than projected state spending on the growing number of unemployed. Nearly half-a-million more Germans are out of work now than this time last year.
The new hole, which was predicted by opposition parties months ago, comes as a severe embarrassment to the government and especially to Theo Waigel, the finance minister. He has staked his political future on the pledge that Germany will fulfil to the last decimal point the Maastricht deficit criteria.
With no chance of fulfilling the requirements on total public debt, the government is committed to keeping the budget deficit under 3 per cent of GDP. Having placed the budget on course for a "point landing", Mr Waigel urgently needs to find the missing money.
"Despite expected tax revenue shortfalls, it will be possible to hold to the Maastricht Treaty's 3 per cent criterion," Mr Waigel declared yesterday. That has been the mantra all year, amid deteriorating economic conditions.
Although decimal points are largely academic, the three-point-nought goal has become a totem of commitment to a hard euro; a symbol of Germany's determination to allow no slacking off.
Yesterday's estimates come in the wake of a series of crises over the budget, each of which threatens the survival of Chancellor Helmut Kohl's government and the prospects of the euro.
Six months ago, when the same experts uncovered the first of the budget holes, Mr Waigel was forced to fly cap in hand to the gnomes of Frankfurt.
His scheme to convert the Bundesbank's hoard of gold into government assets was defeated by the bankers, and Mr Waigel had to sell off shares of some publicly-owned companies instead.
In spite of the setback, the finance minister has not yet renounced alchemy. "Interest-swaps", the withholding of debt repayments and other financial trickery are likely to feature in his arsenal in the last two months of the year. Such measures, coupled with yet more cuts in public spending, should ensure that, come 31 December, the books will show the numbers that everybody in Europe wants to see.
- 1 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 2 US? China? India? The 10 biggest economies in 2030 will be...
- 3 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
- 4 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
- 5 Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
General Election 2015: David Cameron catching up in polls – but he badly needs a clear lead
South Africa xenophobic attacks: Shops looted and violence on streets of Johannesburg as foreigners are forced to hide in police stations
18th century sex toy found in 'toilet of sword fighting school' in Poland
'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
The only black face in the Ukip manifesto is on the page about overseas aid
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...
£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...
£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...
£30000 - £40000 per annum + Benefits: Ashdown Group: Front-End UI Application ...