Berlin suggested that balanced budget of Germany 2008could be attained should the public deficit go down. In fact Germany was not complying with the norm that a nation of the Eurozone was prohibited from allowing public deficit to cross 3%.
Increased earnings from taxes have somewhat altered the trend when the country slimmed the figure of public deficit.
The German economy constitutes about one third of the 13 economies of the Eurozone. However, the growth in German economy is not as rapid as it used to be due to the fact that there has been considerable slow down in the economy of United States of America.
Attaining a balanced budget in 2008:
It is being increasingly felt that balanced budget of Germany 2008 ought to keep in mind the economic developments of 2010. The country registered the public surplus for the first time ever since the two nations were reunited in the year 1990. It is also being reckoned that German economy may show an expansion of 2.9% in the current year(2008).
A balanced budget of Germany 2008 was predicted by Berlin for the year 2010. This was decided after public deficit was narrowed by 1.6% of the gross domestic product or GDP. It is being assumed that owing to the increase in revenues, the country will attain a balanced budget in 2008, which has also been one of the reasons why Germany could shed its public deficit. Berlin has further expressed that this figure of public deficit of 1.6% would further go down in future. In fact, reports suggest that the Berlin was aiming at bringing down the public deficit ratio to 0.5% so that balanced budget of Germany 2008 could be achieved.
European Stability and Growth Pact:
As per norms of the European Stability and Growth Pact, nations belonging to Eurozone are not permitted to have deficit ratios exceeding more than 3%. Nevertheless, Germany had not maintained this norm since the year 2002.
The German government has embraced an expanded fiscal policy owing to the reforms in corporate taxes.