German chancellor Angela Merkel today began a two-day meeting with ministers to hammer out a savings plan for the country's budget that could include cuts to federal staff, lower social welfare benefits or tax rises, in the latest effort to get Europe's massive debts under control.
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The meeting follows the weekend G20 summit of finance ministers and central bankers in South Korea, which called on indebted countries to speed up the pace of austerity drives, marking a significant change in tone from April's meeting, which said governments should maintain support for their economies until the recovery was on a more solid footing.
Germany faces a budget deficit of more than €86bn (£71bn) this year and has said it needs to cut at least €10bn annually until 2016. "The main concern of citizens is that the national deficit could take on immeasurable proportions," said the finance minister, Wolfgang Schäuble, adding that the plans are an attempt to ensure future prosperity.
Merkel stressed that Germany can no longer live beyond its means, insisting "we can only spend what we take in".Cuts to thousands of public service jobs, a reduction of handouts to new parents, cuts in military spending and increasing taxes for energy providers are among the measures being considered in Berlin to bring the national deficit back down. |