Germany outlines tough budget cuts

Germany outlines tough budget cuts
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Germans face a gloomier economic forecast for the coming years according to their government’s plans to cut its budget.

By 2014, the German state is looking to save 80 billion euros, with parents and the army among the biggest losers.

Just over 11 billion euros will come off next year’s budget, with savings then rising to 19 billion euros in 2012, 24.7 billion euros in 2013 and more than 30 billion euros in 2014. It’s hoped that will bring Germany’s budget deficit, which next year is likely to exceed five percent, into line with the EU limit of three percent.

Chancellor Angela Merkel thrashed out the savings package in a two day meeting of conservatives and liberals in her coalition.

She admitted that cutting money given to parents will be a particularly painful measure but insisted that it should be done in such a way that it is fair and will provide a good incentive for mothers and fathers to return to work.

Berlin is avoiding putting up income tax but state benefit cuts will be felt in the pocket of parents and the long-term unemployed.

The Defence Ministry will also look into whether it can cut 40,000 personnel, or almost a sixth of the military workforce.

To raise revenue it is looking to tax profits at nuclear power stations and put an “environmental” levy on airplane tickets.

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