Germany plans €5-6bn in more cuts by 2014

The German government is eyeing 5.0-6.0 billion euros ($6.5-7.8 billion) in additional spending cuts in 2014 in a bid to balance the government budget, a newspaper reported on Friday. The regional daily Rheinische Post quoted the deputy chief of the conservative CDU party, Michael Meister, as saying: "If we want to reach the so-called structural zero in 2014, we must close a gap of around 5.0 billion euros. "That can only be achieved by spending cuts," Meister added. The so-called structural deficit is the government's financial shortfall after adjustment for cyclical factors. Already in December, Finance Minister Wolfgang Schaeuble said Germany planned to balance the overall state budget -- which on top of the government budget also includes the regional state and municipal budgets -- as early as 2012 rather than in 2014 as previously envisaged. And in those projections, the government budget would still be in deficit in 2014, to the tune of around 5.0 billion euros. Under rules enshrined in the European Union's Maastricht Treaty, member countries are not allowed to run up overall states deficits in excess of 3.0 percent of gross domestic product (GDP) and must balance their budgets in the medium term.