The public sector deficit for Germany is on track to slip under the European Union’s limit of 3% of gross domestic product during 2011, which is one year ahead of the official schedule, according to Financial Times. On Wednesday, German economy minister Rainer Brüderle said strong growth in 2011 would “probably” bring the country’s deficit to around 2.5% of GDP, down from 3.5% in 2010. The official forecast for 2.3% growth during 2011.
The positive news on the German deficit is hoped to offer some reassurance to global investors as the eurozone continues to struggle with sovereign debt woes. In an interview with the Handlesblatt newspaper, German economic adviser Lars Feld warned that Germany should be prepared for a Greek default, adds Bloomberg News. Feld opined, “I don’t believe that Greece will manage to deal with its debts without a cut,” cautioning, “And then German guarantees will come due.” According to The Daily Telegraph, the warning comes as EU finance ministers failed to agree on an expansion of the €440 billion European Financial Stability Facility.
Click here to read the story on the German budget from Financial Times.
Click here for coverage of Lars Feld’s comments from Bloomberg News.
Click here to read the article on the EU summit from The Daily Telegraph.