BERLIN, Jul 15 – Germany, Europe\’s top economy, will meet its European Union deficit goals one year earlier than expected, new projections from the finance ministry showed on Thursday.
Germany\’s deficit is set to be 4.5 percent of gross domestic product (GDP) this year, dropping to four percent of GDP in 2011 and three percent of GDP in 2012, the document drawn up by federal and local government officials said.
Moreover, the deficit is set to continue shrinking, reaching two percent of GDP in 2013 and 1.5 percent in 2014.
The EU\’s Stability and Growth Pact requires member states to have public deficits below no higher than three percent of GDP and to work towards a balance in times of economic growth.
However, the rules have been flouted in recent years as countries have boosted spending to combat recession and the European Commission has proposed that countries breaking the rules should forfeit cash handouts from Brussels.
Berlin had promised Brussels it would get to the three-percent target by 2013.
To reduce Germany\’s deficit mountain, Chancellor Angela Merkel has laid out a savings package worth more than 80 billion euros (102 billion dollars).
The austerity measures came under fire from some quarters — notably the White House — as it was feared that too strict a savings package could throttle a recovery before it had really taken off.