Germany abolishes national holiday to cut deficit

The German government says Germany can no longer afford its national holiday and plans to abolish it to reduce its budget deficit to meet the Maastricht criteria.

The cabinet yesterday also agreed plans to sell off what remains of Berlin's family silver and to celebrate German unity of 1990 on the first Sunday in October instead of October 3rd.

"We should celebrate German unity. But we also have to work more for German unity," said Mr Hans Eichel, the German finance minister yesterday.

Losing a work day was costing around half a billion euro in lost taxes, and this year's €5 billion hole in the budget means Mr Eichel needs every cent.

Berlin is on course to breach the three per cent deficit ceiling of the Maastricht Treaty in 2005 for the fourth time in succession, according to the European Commission.

Berlin disagrees, saying in a statement yesterday that it would "outline...at the start of December how we intend to meet the [ pact] requirements. and maintain its target of adhering to the 3 per cent level of the European stability and growth" next year and in coming years.

In an attempt to row back from its fourth stability pact breach, Mr Eichel plans to raise €5.5 billion by selling off pension liabilities of Deutsche Post and Deutsche Telekom, the former state monopolies, and other state assets.

Civil servant salaries will be frozen next year to save further money, but Mr Eichel dismissed speculation that he was planning to raise taxes.

German economic experts have warned that the country's tentative economic recovery this year could be over before almost before it began.

Official statistics released yesterday showed that unemployment in October rose for the ninth month in a row to 10.7 per cent, a five-year high, with a seasonally-adjusted increase of 189,000 jobless so far this year.

The plan to abolish the October 3rd national holiday met a mixed reaction yesterday on the streets of Berlin, a city where the fall of the Berlin Wall on November 9th has more resonance.

"It's nice to have a holiday but if you need to abolish one, get rid of Pentecost. It's what they did in a sane country like France. Germany is absurd," said Mr Hans Selge, a literature student.

"I think it sends the wrong signal. You wouldn't see the French abolishing the 14th of July and celebrating on some other day," said Mr Thomas Tauer, a law student.

Germany has nine national holidays and numerous additional state holidays which can bring the number of days off each year to as high as 15, topping the European league table.

Mr Eichel said the decision came about after a number of national and religious holidays had fallen on weekends this year, contributing 0.5 per cent to the economy.

The economics ministry cited unnamed experts who said abolishing the October 3rd holiday would help the German economy grow by an extra 0.1 per cent next year.