German unveils austerity measures

| June 7, 2010 | 0 Comments
German unveils austerity measures

Following a two-day cabinet meeting, German Chancellor Angela Merkel has unveiled austerity measures after she said Germany cannot live beyond its means.

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.

Germany will cut the budget deficit by a record €80 billion (£66 billion) over the next 5-6 years.

The measures agreed include a plan to slash €30 billion from the welfare budget, including a reduction in subsidies to stay-at-home parents.

In the meantime, up to 15,000 Government jobs could be cut over a four-year period, while there will be higher taxes on nuclear power.

Furthermore, the Government will introduce an environmental tax on passengers flying from German airports.

According to Chancellor Merkel: “Germany has an outstanding chance to set a good example”.

The measures come 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.

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