German Finance Minister Hans Eichel is likely to present proposals for extra measures to trim next year's budget deficit after updated tax estimates are published November 4, government sources told Reuters on Sunday.
Eichel last week pledged to do everything possible to bring Germany's 2005 deficit back below a European Union limit of three percent of gross domestic product (GDP). Germany risks breaching the cap for a fourth straight year next year.
"Of course the ministry is considering such a route," the sources said. "However, they will not be measures that might crimp economic growth."
A finance ministry spokeswoman on Saturday denied a report in the Welt am Sonntag newspaper that Eichel was planning cuts in subsidies for commuters and the introduction of a levy on extra payments for night and Sunday shifts.
Exemptions for some manufacturing companies from ecological taxes could also be scrapped to help reduce the budget shortfall, the paper said.
Germany's public finances have slipped into the red as sluggish economic growth and high unemployment crimp tax revenues. A package of phased income tax cuts, the final stage of which is due to take effect in January, has also helped swell the deficit.
Dutch Finance Minister Gerrit Zalm, current president of the EU's council of finance ministers, said this week Germany and three other members of the 12-nation euro zone risked busting the deficit limit with unchanged policies.
The International Monetary Fund expects Germany's deficit to come in at 3.9 percent of GDP this year, shrinking to 3.3 percent next year, fund sources told Reuters on Sunday, citing its latest report on the German economy.
A report in Saturday's Berliner Zeitung newspaper, said Germany's total 2004 and 2005 tax revenues will be about 5.5 billion euros ($6.95 billion) smaller than estimated in May.
However, this would represent less of a shortfall than Eichel had feared amid stronger-than-expected state and local authority tax income, the paper said.
The report cited unidentified officials charged with preparing twice-yearly tax revenue estimates next due for publication on November 4.
The finance ministry spokeswoman said the report was "speculation".