German borrowing target smaller than expected

The German government's net new borrowing need is likely to be much lower than forecast this year and next, a newspaper reported on Tuesday.

Thanks to improving tax revenues and lower than expected spending on unemployment benefits, the federal new borrowing requirement was likely to be between 60 billion and 65 billion euros ($74 billion and $80 billion) in 2010, daily Sueddeutsche Zeitung said.

Citing a budget paper from Chancellor Angela Merkel's ruling centre-right coalition, the paper said net new borrowing in 2011 could total around 55 billion euros — below a figure of nearly 72 billion previously published in mid-term planning.

Finance Minister Wolfgang Schaeuble recently said net new borrowing was likely to come in at around 65 billion euros this year — below a sum previously estimated at some 80 billion.