Germany's Schaeuble denies election spending splurge

Reuters News
Posted: Jun 01, 2013 1:00 PM
Germany's Schaeuble denies election spending splurge

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble rejected on Saturday suggestions the government will significantly loosen public purse strings for September's federal election, though he said there may be scope for modest additional spending.

Chancellor Angela Merkel, whose conservatives are well ahead in opinion polls, signaled this week that more funds could be made available for families and for infrastructure projects.

Her comments stirred concern among some fiscal conservatives in her center-right coalition and criticism from opposition parties who accused her of irresponsible electioneering.

The top-selling Bild daily on Saturday put a price tag of 28 billion euros on Merkel's "present" and said it showed Germany's election campaign had finally begun.

Schaeuble, in a statement sent to Reuters, said there was no change in the government's resolve to cut public debt and that he found the newspaper's price tag "incomprehensible".

"The route is clear. We will continue our growth-friendly consolidation," said Schaeuble, reaffirming plans to eliminate the budget deficit and reduce the country's debt pile.

Schaeuble added that the government had earned a small amount of leeway through its prudent budget policies and confirmed that help for families and targeted investments in transport infrastructure were priorities.

Germany, which has insisted that heavily indebted euro zone countries such as Greece and Spain adopt tough austerity measures despite being deep in recession, aims to achieve a balanced budget in 2014 for the first time in decades.

Strong economic growth, buoyant tax revenues and lower unemployment have helped Germany, Europe's biggest economy, to reduce its borrowing costs despite the ongoing euro crisis. German public debt nevertheless remains well above the EU's 60 percent ceiling at over 80 percent of gross domestic product.

(Reporting by Gernot Heller; Writing by Gareth Jones; Editing by Catherine Evans)