Germany Is Preparing For Elections

World News Rudolph Rodriquez
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Given that the German parliament has begun the debate on next year’s budget, the German Minister Wolfgang Schaeuble, known for the passion with which he promotes austerity, seems to have changed his position and announced he would support the introduction of tax breaks for those with meager wages and increasing government spending.

Schaeuble has proposed reducing income taxes on salaries for those with low and middle wages in Germany, the draft budget for 2017 the Minister also predicting spending of 328.7 billion euros, up with 3.7% over the year. In addition to increased social spending, more money will be allocated for education and research, transport, digital infrastructure, internal security and defense.

Schaeuble, who has rejected calls in recent years to reduce the registration fees despite record surpluses, said it would also act to restrict the process by which employees are pushed to higher tax brackets because their wages increase. Consumer prices grow in parallel, leaving taxpayers with less money in their pockets to spend.

German minister announced that the government has about 15 billion euros to provide tax relief without accumulating new debt. It also said that Germany will not restrict spending on internal security in a time when Germans’ sense of security has been shaken by two terrorist attacks this summer. According to Schaeuble, the interior ministry budget in 2017 will reach about 8 billion for the first time.

The debate on the budget began the same day the German economic institute estimated that Germany’s current account surplus will reach 278 billion euros this year, the highest in the world. Exports have already exceeded imports by about 140 billion euros in the first half of this year.

Governments in Europe and the US have urged Germany to encourage an increase in imports to help boost economic growth worldwide. Germany rejected such calls, saying it has already taken measures to increase domestic demand by introducing a national minimum wage in 2015.