Finance Minister Wolfgang Schäuble’s draft budget for 2018 has an €8.3-billion ($8.7-billion) shortfall due to a spike in spending and a drop in revenue, according to figures from the draft obtained by Handelsblatt.
Spending in 2018 will increase by €20.4 billion due to additional expenditures on the refugee crisis, domestic security and humanitarian assistance among other things. Revenues will also decline, in part due to €6.3 billion in tax relief planned, leaving a budget shortfall after a surplus expected this year.
Mr. Schäuble has ruled out taking on new debt through 2021. To plug the 2018 gap, the finance ministry plans to come up with €3.4 billion by a March 15 cabinet meeting, which would reduce the budget shortfall to €4.9 billion. According to a finance ministry document, the remaining shortfall of €4.9 billion is the responsibility of the next government. Germany holds federal elections in September.
Germany balanced its budget in 2014 and has run bumper surpluses since then due to a windfall of revenue from record employment and historically low interest rates.