Falling Behind: Germany Fails To Meet Its Own Austerity Goals
European countries are expected to implement tough austerity measures amid the debt crisis. But Germany isn't setting a very good example. SPIEGEL has learned that Berlin failed to reach its own austerity goals in 2011. And despite pressuring its neighbors to save, Germany is behind this year too.
As she travels from one European Union summit to the next, Angela Merkel's constant mantra in recent months has been austerity, austerity, austerity. But apparently the German chancellor hasn't been quite as strict when it comes to her own country's budget.
Calculations made by the influential Cologne Institute for Economic Research indicate that only 4.7 billion ($6.16 billion) of the 11.2 billion in austerity measures stipulated by the savings package actually took shape in 2011.
The government is also falling behind on its targets for this year. Of the originally planned 19.1 billion in savings, less than half has been implemented. For the coming year, the concrete measures that have been agreed on so far cover just one-third of the announced amount of savings. Merkel's cabinet is hoping to agree to the basic foundations of the 2013 federal budget in March.
The aim of the pact is to make EU countries maintain binding austerity measures that leaders hope will contain the debt crisis and prevent countries like Greece from being able to pile up massive debts again. "It is a milestone in the history of the European Union," Merkel said at the signing of the pact.
Under Germany's balanced budget legislation, the federal government and the German states have set upper ceilings for new borrowing. The fundamental goal is to eliminate all borrowing by 2020. The German states will be strictly forbidden from new borrowing starting that year, and the federal government will only be able to borrow up to 0.35 percent annual economic output a year, or about 9 billion.
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