Germany's next government should be able to limit new borrowing in 2006 to €21.5 billion but faces a huge shortfall in revenues from 2007, according to a draft of the 2006 budget.
The draft, drawn up by the current Social Democrat-Greens government, which is seeking an early election in September, foresees new borrowing next year of €21.5 billion, just below planned "investment" spending of €22.4 billion - a German constitutional requirement.
However, it says this will only be possible with the help of €23 billion in privatisation and other revenues, such as securitisations, one-off measures that won't be available from 2007.
The draft repeats the government's aim is "the complete withdrawal of the federal government" from former state monopolies Deutsche Telekom and Deutsche Post.
"From the year 2007 the budgetary plans show a huge structural (shortfall) of €25 billion a year," the draft says.
Because of the planned early election, which has yet to be approved by German President Horst Koehler, the cabinet is due to merely discuss the document on Wednesday. German opinion polls put the opposition conservatives as favourites to win any early poll.
Whichever government is elected will have to formally adopt a budget. The 2005 budget aimed to hold new debt issuance to €22 billion, although the government now admits it faces a shortfall of €12 billion, meaning borrowing is likely to exceed the original target.