FXStreet (Łódź) - Carsten Brzeski from ING comments on Germany's presentation of the first planned balanced budget since the end of the 1960s yesterday.

Key quotes

"The medium-term planning foresees a balanced budget throughout the entire period between 2016 and 2018. The balanced budget will be ensured by increasing tax revenues. Expenditures will continue to increase."

"As regards to the 2015 budget, the German government obviously wants to demonstrate that squaring the circle is possible. While recently several Eurozone governments have started a new attempt to loosen fiscal austerity for the sake of more economic growth, the German government has sent a signal that the combination of a balanced budget and more investment is possible."

"Of the expected tax revenue increase by €10bn in 2015, some €7bn will be invested in education, research and infrastructure. However, given the small size of additional investments and the significantly dropped investment ratio, calls for more government action will not fall silent."

"With the 2015 budget, the German government has fulfilled one of its election promises: to give high priority to solid and sustainable public finances."

"The presentation of the budget was also a clear hint for the rest of the Eurozone that the German government sees no necessity in combining austerity and investment under the current fiscal framework. It is hard to believe that the German government will be tougher on itself than to others."


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