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Germany to increase public spending in next three years

Xinhua, March 4, 2015 Adjust font size:

German federal government said on Tuesday that it would spend an additional 5 billion euros (about 5.59 billion U.S. dollars) in the next three years to help local communities improve infrastructure and boost investment.

The additional spending on top of a 10-billion-euro investment plan announced by German Finance Minister Wolfgang Schaeuble last year would not affect Germany's strict fiscal principle, according to the Finance Ministry.

"The goal of balanced federal budget with no new debt set in the coalition agreement should not be challenged," the ministry said in a statement.

It also clarified details of Schaeuble's 10-billion-euro plan. From 2016 to 2018, 7 billion euros would be invested in public transport infrastructure, energy efficiency, digital infrastructure, climate protection and urban development. The remaining 3 billion euros would be spent on "future-oriented issues."

German federal government reached a budget balance and added no new debt in 2014, a year earlier than it initially planned, thanks to high tax revenue and lower-than-expected payments.

It wanted to set an example of strict financial principle in the euro zone, but received criticism from neighbors and the United States which accused Europe's biggest economy of not spending enough to boost investment in Germany and imports from other euro zone countries. Endit