Germany moves to counter tax revenue shortfall

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Germany moves to counter tax revenue shortfall

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In its latest tax forecast, the German Finance Ministry has revealed that revenues will be 3.4 billion euros less than it has previously forecast. Finance Minister Hans Eichel says the government will transfer pension liabilities and freeze wages for civil servants to try to boost the economy and close the budget gap. In addition the Unity Day holiday, celebrated on 3rd October, will be permanently moved to a Sunday to add an extra work day. Unity day was added to the holiday calendar in 1990 to celebrate there-reunification of Germany after the fall of the Berlin Wall. Labour Minister Wolfgang Clement said it has been calculated the economy could grow by an additional 0.1% if Unity Day is transferred permanently to weekends.

Rising unemployment and higher oil prices have led to a fall in German consumer spending. That has increased pressure on the Berlin government to find ways to avoid breaching European Union deficit rules for a fourth time.