Eichel to save €10bn in 2003 German budget

German Finance Minister Hans Eichel said he wants to save €10bn in the 2003 budget and avoid tax hikes if possible.

In today's Sueddeutsche Zeitung, Eichel said he will present concrete suggestions at coalition talks between the SPD and Green parties, which begin this evening.

He expressly said he was against both the introduction of a property tax and an increase in the inheritance tax.

Eichel confirmed reports that Germany will have to lower its economic growth forecast for the coming years.

"For the years 2003 through 2006, I want to work from a basis of 1.5%," Eichel said. The government had originally forecast 2.5% growth for 2003.

But Eichel said the government was not satisfied with the projected growth rate and would work to boost it through sound economic policies.

Eichel also said he would not rule out a supplementary budget for the current year.

The magazine reported that Eichel is already preparing a supplementary budget which will allow the government to increase its debt by an additional €13bn to €34bn in 2002.

He said the government will also need more credit in 2003, and is likely to lift its projected debt from €15.5bn next year to more than €20bn.

The changes would lift Germany's deficit to 3.5% in 2002 and to above 3% in 2003.