Germans and Britons prepare for painful budget cuts

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Germans and Britons prepare for painful budget cuts

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Germany’s long-term unemployed, parents and the country’s army are among those with the most to lose from budget cuts announced on Monday.

Berlin is looking to save 80 billion euros by 2014, starting with a spending reduction of 11 billion euros next year. Cuts will then rise in the years after that.

Chancellor Angela Merkel admitted some measures will be painful but that Germany has no choice but to trim its budget deficit.

“The last months have shown the importance of stable finances, in relation to Greece and other countries. I believe that Germany, as a major economy, has the extraordinary task of setting a good example,” she said.

State benefits to parents and people who have been out of work the longest will be two of the cuts that will hit German pockets. The government is also looking at how it can shed up to 40,000 jobs in the military, or almost a sixth of army personnel.

The people of Britain face similar bad news when an emergency budget is unveiled in two weeks. Prime Minister David Cameron is already preparing them for the worst. He said on Monday:

“Today we are all paying the price because the size of the public sector has got way out of step with the size of the private sector. We are going to have to try and get it back in line and that will be much more painful than if we’d kept things properly in balance all along.”

Cameron does have the luxury of being able to blame the former Labour government for Britain’s financial state. Now in opposition, Labour are warning that planned cuts for this year could send the country into another recession.