German Finance Minister Hans Eichel said yesterday he would unveil plans to cut subsidies in order to tackle Germany's budget deficit after the national election on September 18th.
Mr Eichel will report a 2005 budget deficit of 3.7 of gross domestic product (GDP) to the European Union this week although the figure could yet be corrected up or down by a tenth of a percentage point after final calculations, his spokesman said.
After repeated calls from the conservative opposition for Mr Eichel to explain how he would combat spending, the minister said he would announce subsidy cuts "with the same fiscal affect" as those blocked by the conservative upper house of parliament.
He added he would also reduce the amount of essential items to which a lower percentage of sales tax was applicable. "That would be that and it would bring in a lot of money," Mr Eichel said.
The opposition conservatives (CSU/CDU) are favoured to take power from Chancellor Gerhard Schröder's coalition of Social Democrats (SPD) and Greens.
Mr Eichel had already announced a 3.7 per cent deficit during his presentation of the budget to parliament in July.
Such a figure means Germany would breach EU budget rules stipulating deficits may not exceed 3 per cent of GDP for the fourth year in a row.
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