MIL OSI – Source: German Ministry of Finance – in English –
Headline: Federal cabinet adopts Stability Programme for 2015
On 15 April 2015, the federal cabinet adopted the German Stability Programme for 2015. Public finances in Germany remain on the right track. The general government budget of the Federation, Länder, local authorities and social security funds will continue to be balanced in a robust manner over the coming years. Germany’s debt ratio is expected to fall to 61½% of gross domestic product by 2019, according to current projections.
In 2014, the general government budget of the Federation, Länder, local authorities and social insurance funds achieved a slight surplus for the third year in a row. The level of general government debt has been successfully reduced since its 2010 peak of 80.3% of GDP. At the end of 2014, it stood at 74.7% of GDP. This year, it is expected to fall to 71½% of GDP. The EU’s Stability and Growth Pact stipulates an upper limit of 60% of GDP for public debt.
According to the Stability Programme, the general government budget will be balanced until 2019. With regard to the structural fiscal balance, the requirements of the Stability and Growth Pact and the Fiscal Compact will be complied with by a comfortable margin during the whole period. The general government debt ratio is expected to decline steadily and is forecast to fall below the 70% mark in 2016.
All the fiscal policy targets that Germany laid down in last year’s Stability Programme were achieved in full. The German economy is robust, and economic growth is above the trend rate of growth. Employment will once again set a new record this year, with the number of employed persons predicted to rise to over 42.8m.
With its sound budgetary policies, the Federation is making a decisive contribution to achieving the European budgetary objectives. In addition, the federal government is creating financial leeway that allows public budgets to be placed on a future-oriented footing. For example, the federal government decided to once again significantly increase the proportion of investment in the federal budget, thereby making it even more focussed on growth. Furthermore, the federal government is providing relief to the Länder and local authorities so that they are able to contribute their respective shares to the future-oriented sectors of education, research and infrastructure.
The member states of the European Union submit their medium-term fiscal plans to the European Commission and ECOFIN, the council of economics and finance ministers, by the end of April each year. By providing updated stability programmes, the eurozone member states are complying with the provisions of the Stability and Growth Pact. All other EU member states are required to submit updated convergence programmes under the rules of the Stability and Growth Pact.
Updated German Stability Programme for 2015Note: Figures for 2015 to 2019 are rounded to one-quarter of a percentage point of GDP.2014
in % of GDP
74.771½68¾6663¾61½more on this topic
German Stability Programme – 2015 Update