Steinbrück warns of ‘mammoth’ debt

Steinbrück warns of ‘mammoth’ debt
Photo: DPA
German Finance Minister Peer Steinbrück warned on Wednesday that the next government after September’s general election would have to contend with a “mammoth” problem of mounting debt.

In light of record borrowing in next year’s budget, Germany’s new leadership would have to focus entirely on getting the country’s finances back under control, he told daily paper Der Tagesspiegel.

However, he ruled out milking the taxpayers to plug the growing gap. “Right now during the crisis it’s wrong to start a discussion about raising taxes,” he told the paper.

The German cabinet is set to sign off Steinbrück’s fiscal plan up through 2013 later on Wednesday. His budget for 2010 calls for €86.1 billion in new borrowing – a record amount of debt.

The total amount of debt could balloon to over €100 billion next year should Germany’s stimulus package and bank bailout result in added costs.

Steinbrück told the Frankfurter Allgemeine Zeitung on Wednesday that he expected the European Commission to start an official case against Berlin for breaching EU deficit rules by at least 2010.

“At that point we’ll have to explain how we’ll get back under three percent” of Gross Domestic Product, he told the paper.

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