Friday June 19, 05:42 PM
German borrowing to explode through 2013: ministry
BERLIN (AFP) - The economic crisis will cause Germany's public debt to explode to record levels in the five years to 2013, provisional finance ministry figures showed on Friday.
A total of 310 billion euros (430 billion euros) in debt is forecast for the period 2009-2013, as economic stimulus packages annihilate years of efforts to bring spending under control.
A ministry statement warned of a "dramatic increase" in the debt and a "severe regression following several years of successful consolidation."
This year, the government expects to borrow a record 47.6 billion euros, but that would pale in comparison with the estimated 2010 figure of 86.1 billion euros, according to the ministry's plans.
Germany is struggling with its worst recession since the second world war, and the government has drafted an economic stimulus package worth 80 billion euros, on top of 480 billion euros needed to rescue the banking sector.
To finance that it will have to borrow funds, forcing Berlin to seek another 71.7 billion euros in 2011, 58.7 billion in 2012 and 45.9 billion in 2013.
The finance ministry will present its plan to Chancellor Angela Merkel's cabinet for approval on Wednesday, but the figures could change following general elections in late September.
The ministry said social spending would represent well over half of the budget next year at 54.5 percent, up from just over 50 percent this year.
On Wednesday, Finance Minister Peer Steinbrueck said the German public deficit will probably reach 4.4 percent of gross domestic product this year.
Under the European Union's Stability and Growth Pact, eurozone governments are supposed to run deficits of no more than 3.0 percent of GDP and to work towards a balance or even a surplus in times of economic growth.
The European Commission, which polices EU countries' deficits, forecasts that 13 out of the 16 euro countries will breach the three-percent ceiling in 2009 and 2010.
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