German Finance Minister Peer Steinbrueck plans to reduce federal net new borrowing next year by some 16 billion euros ($20.3 billion) compared with 2006 to 22 billion euros, a finance ministry spokesman said on Saturday.
Germany's overall 2007 budget deficit - including all levels of government - will therefore be well below a European Union limit of three percent of gross domestic product (GDP). Steinbrueck said late last month the budget shortfall in Europe's biggest economy may already drop below three percent of GDP this year after Berlin breached the ceiling for four straight years.
Germany's ruling coalition of Chancellor Angela Merkel's conservatives (CDU/CSU) and Steinbrueck's Social Democrats (SPD) is due to discuss the 2007 budget in cabinet on Wednesday, after which it will be sent to parliament for approval. The 2006 budget provides for new borrowing of 38.2 billion euros.
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