Germany debates how to spend record 13.5 billion budget surplus

By Theresa Muench, Basil Wegener and Marco Hadem, dpa

German lawmakers were sparring on Tuesday over how to spend a record budget surplus of 13.5 billion euros (15 billion dollars) achieved at the end of 2019.

The preliminary budget surplus figure was reported on Monday by the Finance Ministry in Berlin, which said it was achieved mainly thanks to low interest rates despite a relatively weak economy.

Many conservative German lawmakers, including Economy Minister Peter Altmaier, have long demanded that the country’s consistent budget surplus be used to lower taxes.

The opposition hard-left Die Linke, liberal FDP and far-right Alternative for Germany (AfD) have also called for tax relief.

However, Finance Minister Olaf Scholz of the left-leaning Social Democrats (SPD) said most of the money would flow into a reserve built up after the 2015 refugee crisis, increasing the fund’s value to some 48 billion euros.

The SPD on Tuesday called for more to be spent on infrastructure and aid for Germany’s poorest communities.

“The surplus must now flow into financially weak municipalities, into good education, into modern digitalization and into ambitious action on climate change,” SPD Secretary-General Lars Klingbeil told dpa.

Markus Soeder, head of the Christian Social Union (CSU), the sister party of German Chancellor Angela Merkel’s conservative Christian Democratic Union (CDU) in the southern state of Bavaria, suggested the extra money should be used to cut electricity prices.

“Everyone would benefit from this, both businesses and consumers,” he said on the fringes of a CSU meeting in Seeon in Bavaria on Tuesday.

A balanced budget has been a key part of Merkel’s years in power.

The policy has come under increasing criticism from opposition parties.

The government on Tuesday signed an agreement with the state-owned Deutsche Bahn rail operator to invest 86 billion euros (95.6 billion dollars) in railway infrastructure over the next 10 years.

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