Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-11-15-Speech-3-173"
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"en.20001115.8.3-173"2
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"Mr President, it is true, as I said before, that this is one of the points we highlighted in the case of Germany, in which there are two points of interest. First of all, the proceeds of the UMTS licences, as I said before, have been allocated to reducing the debt, so that the national debt is now practically down to the 60% level.
For accounting reasons, the revenue from the third generation mobile licences also has to be included for reducing the deficit. For this reason, the budget result for the year 2000 in the case of Germany will give a surplus of one and a half per cent of GDP. If we deduct the revenue from mobile licences from this one and a half per cent, we are left with a 1% budget deficit, which is the figure we can use for the stability programme. Therefore, to answer your question, we will have a situation of a 1.4% deficit in 1999, a 1% deficit in 2000, and – as you rightly say – in 2001 the deficit will rise again to 1.5% instead of falling.
Why does the Commission accept this increase in the deficit? Basically, because of the positive impact that the tax measures may have in Germany. Germany has a higher than average tax burden. The set of tax measures adopted by Germany affects the supply side of the economy more than the demand side but will also have some effect on demand, and we believe it will allow the growth potential of the German economy to increase in the medium term. We therefore consider these measures to be positive, even though they mean a step backwards compared with the previous situation.
Nevertheless – and we left this very explicitly set out in the programme – we are especially concerned about this backward step, and we are aware that such backward steps have to be made up later. Hence we must insist on the German Government taking special care when drawing up the working programmes for 2002, on increasing revenue and on cutting costs in order to achieve a reduction in the budget deficit again.
According to the current programme, the budget deficit should drop to 1% in 2002 and 0.5% in 2003, and Germany should balance its budget in 2004. A little late and not quite as we would have liked, but in any case with enough margin not to have difficulties in the event of an economic crisis."@en1
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