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MONEY

German debt rises as energy crisis bites

Germany's public deficit will widen to 3.25 percent in 2023, up from 2.5 percent forecast for this year, as the country spends big to counter a painful energy crisis, the finance ministry said Friday.

German Finance Minister Christian Lindner.
German Finance Minister Christian Lindner. Photo: picture alliance/dpa | Kay Nietfeld

“Next year (…) we will see a deficit of 3.25 percent,” Finance Minister Christian Lindner said, warning that the figure could even reach 4.5 percent depending on “the scale of spending” to help counter soaring gas and electricity prices.

The previous forecast for 2023 was for a deficit of just two percent of GDP.

A “normalisation of public finances” should be achieved by 2024, according to the finance ministry.

“We have made enormous efforts during the crisis to relieve the burden on people and avoid structural disruptions,” Lindner said.

The German economy has been particularly hard hit by the fallout from the war in Ukraine, with spiralling energy costs squeezing the country’s flagship industrial sector and dampening consumer purchasing power.

The government has unveiled a €200 billion ($210 billion) support package to mitigate the impact of the energy crisis, including a cap on gas prices for businesses and households.

The economy is nevertheless expected to contract by 0.4 percent in 2023.

READ ALSO: Germany’s recession to be ‘milder than expected’ in 2023

The government also said in November it expects new net borrowing next year to climb to 45.6 billion euros, more than double the 17.2 billion euros initially estimated.

Germany is however planning to return to the constitutionally enshrined “debt brake” in 2023, which limits annual new borrowing to 0.35 percent of gross domestic product.

The government had lifted the debt brake at the start of the coronavirus pandemic in 2020 to cushion the blow from shutdowns.

But reinstating the debt brake has been a priority for Lindner, a fiscal hawk from the pro-business FDP party who came into office last December.

In order to meet this commitment, the government has announced that “special funds,” such as the €200 billion energy package will be considered separate from the regular federal budget.

Member comments

  1. So, the €200 billion energy package is “off the books” . . . a neat “accounting technique” otherwise known as two + two equals five . . .

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MONEY

How German ministers want to protect online ticket purchases

Once a year, consumer rights ministers from Germany's federal and state governments gather for a joint conference. This year, improving online ticket sales and better data protection measures are on the agenda.

How German ministers want to protect online ticket purchases

North Rhine-Westphalia’s consumer protection minister Silke Gorißen (CDU) will present proposals for further consumer protections for online ticket sales at the consumer ministers conference (VMK) on Thursday and Friday. 

Gorißen is pushing to make online ticket sales more transparent and give consumers more rights to back out of purchases if they don’t have enough information. 

Under the proposals, consumers would receive more information before purchasing tickets, such as details on the number of tickets sold by each provider and the prices for different seat categories.

Currently, ticket prices are often only visible during the purchasing process. 

The ministers will also consider whether consumers should be granted a right of withdrawal when buying tickets online. 

READ ALSO: How Germany is making it easier for consumers to cancel contracts

“The process of buying tickets is becoming increasingly complex and confusing, often limited to very narrow time windows,” Gorißen told DPA ahead of the conference. “I expect providers to act more in the interest of consumers. The market power of large ticket portals should not result in unclear and non-transparent sales.”

More data protection online

According to DPA, Gorißen also wants users of telecomms services to be better protected when it comes to their personal data. 

NRW’s consumer minister believes providers of emails, chats, or telecommunications services should be required to put measures in place to detect malware that’s designed to steal personal information from users. This should be done at the EU level, Gorißen said. 

Moreover, Gorißen says there should be more information on online safety made available through a consumer hotline. 

“IT security responsibility should not solely depend on the digital competence of users,” the CDU culture minister explained. “Protection against cyberattacks must become a societal responsibility.”

READ ALSO: The German mobile companies with the best – and worst – coverage

The proposals are set to be voted on by consumer ministers on Friday. 

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