Germany plans tough spending cuts
Germany has announced this weekend that it plans to bring its deficit down to meet EU rules.
Chancellor Angela Merkel is heading up a two-day cabinet meeting to devise a savings plan for the country’s budget, which is expected to see tough measures including road tolls, tax hikes and cuts to welfare.
The country’s public deficit currently stands at 3.3% of GDP and the public debt rose to 73.2% – exceeding the 60% level set by Brussels.
The news comes after Italy unveiled a three-year austerity plan worth €24 billion (£20 billion), in a bid to bring its deficit down to below 3% of GDP by 2012 – from 5.3% currently.
Greece, Spain and Portugal have already implemented tough austerity measures, but they have angered workers and led to violent protests.
The tough measures come as the euro zone is battling with a major debt crisis with concerns that the crisis could spread to other nations.
Meanwhile, Germany faces a deficit of around €86 billion (£83 billion) this year and has to trim €10 billion a year over the next 5-6 years.
Chancellor Merkel has said Germany cannot live beyond its means, saying “we can only spend what we take in”.