A supplementary budget by the German government to stimulate the economy is expected to breach a cap on public spending imposed by the European Union, some officials in Berlin said Sunday. Speaking a day before the three parties in Chancellor Angela Merkel's coalition meet to discuss injecting 50 billion euros ($68 billion) into the economy, a finance ministry spokesman said whatever was decided would be promptly put into effect. The federal government is expected to spend somewhat less than 50 billion euros, but argues that grants and tax cuts could seed that amount in additional spending during this year and next. While the ministry offered no comment on the effects of the supplementary budget, research staff of the Christian Democratic caucus in parliament reportedly suggested the bill this year might be 30 billion euros.
Speaking a day before the three parties in Chancellor Angela Merkel's coalition meet to discuss injecting 50 billion euros ($68 billion) into the economy, a finance ministry spokesman said whatever was decided would be promptly put into effect.
The federal government is expected to spend somewhat less than 50 billion euros, but argues that grants and tax cuts could seed that amount in additional spending during this year and next.
While the ministry offered no comment on the effects of the supplementary budget, research staff of the Christian Democratic caucus in parliament reportedly suggested the bill this year might be 30 billion euros.
Basic Law for the Federal Republic of Germany (Grundgesetz, GG)
Article 115 [Borrowing] (1) The borrowing of funds and the assumption of surety obligations, guarantees, or other commitments that may lead to expenditures in future fiscal years shall require authorization by a federal law specifying or permitting computation of the amounts involved. Revenue obtained by borrowing shall not exceed the total of investment expenditures provided for in the budget; exceptions shall be permissible only to avert a disturbance of the overall economic equilibrium. Details shall be regulated by a federal law.
(1) The borrowing of funds and the assumption of surety obligations, guarantees, or other commitments that may lead to expenditures in future fiscal years shall require authorization by a federal law specifying or permitting computation of the amounts involved. Revenue obtained by borrowing shall not exceed the total of investment expenditures provided for in the budget; exceptions shall be permissible only to avert a disturbance of the overall economic equilibrium. Details shall be regulated by a federal law.
