Financial leaders warn of spending-to-noise

The economy is doing well, gushing government revenues. This raises new demands. But the housekeeper of the Coalition warn expensive new projects. And Germany should be in reducing the budget deficit model in Europe.

Berlin - The housekeepers know the game. Little bubble and government revenue and social security, new desires are awakened. The ministers, the deputies themselves at both government and opposition.

Everyone wants to implement plans and projects. And as things are looking good. In the first half of 2012, federal, state, local government and social security measures, according to preliminary calculations, a € 8.3 billion more than they spent. The good news for German Finance Minister Wolfgang Schäuble (CDU) has its negative side.
For the FDP politician budget in parliament, Otto Fricke, is already clear: "Many wishes edition will also come from our own ranks." This will prevent the householder in the face of seemingly positive recent data. Because they are at first sight so beautiful that some might hineinphantasieren into an output noise. But the impression that the money on the federal side only bubbles so - the gross domestic product (GDP) growth of 0.6 percent was achieved - sometimes deceptive refer primarily was winning the social insurance of 11.6 billion euros. This was offset by a deficit in the budgets of federal, state and local authorities of 3.3 billion euros.

Especially the good situation in the labor market brought the state more money. Such revenue rose from the personal income tax in the first half by 6.3 percent to 109.1 billion euros. From social contributions by 2.8 percent to 217.9 billion euros Government spending had risen in the same period with an increase of 0.8 percent only moderately, the Federal Statistical Office.

Householders warned

Because no one can predict whether the current revenue also continued during the year, as opposed to the householder too big jumps. The chief steward of the Union faction in the Bundestag, Norbert Barthle, said: "The news of the increased revenue may sound pleasing but this should not cause anything to pass on to the government.".

Barthle refers to several risks that Germany - and hence the federal budget - has to shoulder in the euro crisis:

Due to the decision at the last EU summit in Brussels capital from the European Investment Bank (EIB) to € 10 billion in Germany accounts for a contribution of around 2.7 billion euros.
If the ESM permanent bailout actually enter into force on the federal budget would add more costs. The German ESM total of 21.7 billion should be later this year, the first two installments of € 8.7 billion will be paid.
In addition, there are the uncertainties in the skyrocketing costs of major airport Berlin-Brandenburg. "It may well be that the federal government must help out there with hundreds of millions of euros," predicts the chief steward of the CDU / CSU.
Desires could also be raised again at the health insurance contributions. Because more employees are covered by social security in jobs, there's been a long time again to a plus. But the health insurance contributions will lower the coalition, the current pads are used up very quickly, "We should all the contribution rate, as it is now, let us stand and thus exposure to changes in the future prepare," said Barthle.

A test of the coalition is a major project from the house of the Federal Labour Minister Ursula von der Leyen. The CDU minister wants to introduce the pension contribution, with the long-standing workers according to specific criteria to receive a minimum pension. The project is controversial in the Union and the FDP. Von der Leyen has but - indirectly - linked their fate in the cabinet to the enforcement of this project. The cost, according to its Ministry: 2014, € 380 million in 2030, however, already 3.8 billion euros - ie a tenfold increase.

Closed meeting next week

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For Fricke is given the latest figures but the principle. "The biggest mistakes are always made in the budget in good times" The FDP has long been a desire pushes ahead of him: the abolition of the practice fee. With the cash you take per year around two billion euros. Quite possible that it falls when von der Leyen wants to enforce their pension contribution. About their project to be spoken in the fall in the coalition committee.
Next week will meet first the householder the black-yellow coalition for common exam. There will advise the other course, the budget of the Federal 2013. Here, except for the work and ministry of health, in all departments increases provided. The FDP politician Fricke guesses what triggered the recent data are warned, however: "We have no more money in the pot, but should continue to reduce our debt."

That, as the Liberals had, absolutely necessary for two reasons: "First, we should set an example in Europe in reducing the budget deficit." And on the other "come back to us time in which it is economically worse off." Fricke himself does not believe that the numbers in the second half be even as good as now. You are an exception. The increase of 0.6 percent of gross domestic product in the first half came as a surprise even for the coalition. Even 2011, there had been a deficit of one percent of gross domestic product. And even in the first quarter of 2012, the state had spent more than 33 billion euros taken.

GBP/EUR - After Euro wobbles now the British pound

Great Britain is the next Greece? Unsound public finances have let the pound slide to its lowest level in ten months. Because the situation is not much better than in Greece. And it threatens to further trouble. Britain is the good credit risk.

Since late 2009 the euro to slip came, Europeans from the City of London next to well-meaning advice also must listen to some nasty remark about their currency. But now it is the British pound, which is more and more concern, and occasionally ridicule upon themselves. Beginning of the week the sterling fell below the 1.50 dollar, it was the lowest in ten months. Within five trading days of the British currency has lost about four percent to the greenback. Analysts predict a new phase weak pound.

While the Greek public finances this year were subjected to a real autopsy, Britain needs were pushed into the background. A series of bad news has investors last but caused the instability of London today: "Retail sales, wage and employment data mortgage market development - all this was weak in," said Chris Turner, analyst at ING. But inflation was higher than predicted: A negative combination that suggests close to stagflation as a healthy economic recovery.

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The Canadian research firm BCA comes in an investigation concluded that England is behind Iceland, Greece, Portugal, Ireland, Spain and Italy are the most financially vulnerable country. The British state budget is in a similar condition as the desolate Greek. The European Commission estimates the budget gap to 12.9 percent of economic output, compared with a Greek deficit of just over twelve percent.

Also, the total debt of the Kingdom is not conducive to calm the minds of investors. Already this year the island nation should be 80 percent of gross domestic product in the Cretaceous. So oppressive the interest and repayment burden has never been since the end of World War II. Here, the loans and companies are not even counted. Extrapolating this with one, the Brits are at 460 percent of its economic power in the Cretaceous. The ratio is only slightly behind the record level of 485 percent, bringing it to the debt champions Japan.

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Switzerland is a small but proud country. The Alpine Republic is a democratic basis and fortified and was always proud of his neutrality. However, before turmoil in the financial markets do not protect even the highest mountains.

With the coupling of the Swiss franc to the euro exchange rate in Switzerland has made some of their financial sovereignty and neutrality. But in the end, the number of alternatives was manageable. In the debt crisis, euro and dollar rub together. Investors who wanted to take this short-term fluctuations have not perceived the franc as a safe haven, and driven the price of foreign exchange at unprecedented heights. The results are overwhelming. Tourists shun become unaffordable for many destinations, and Swiss exports of the machine to the Clock to be either dead stock or abroad can only be the object of the profit margin will be sold off. If the share price went so on, the Confederates would have been plunged into recession.

Whether it is possible to stabilize the economy of Switzerland is an open question. Even the retracted from the Swiss National Bank's upper limit of 1.20 francs per euro is historically high. In addition, such interventions have always tried out currency speculators.

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The Swiss experiment marks the way, would go to Germany, too, would prevail in the euro-skeptics. A rapidly gaining strength D-Mark would affect the export business difficult, if not even bring to a halt. Coupled with low interest rates (German bonds were in demand as a safe harbor) could lead to a similar paralysis of Japan has been suffering for years. The only advantage would be that the German finance minister would be easier because of the exchange rate advantage in debt to pay back € made.
The bottom line shows, Switzerland is also the German view, little desirable scenario. In addition, the coupling of the Swiss franc, the yields on German bonds is still under pressure. The number of safe havens has become smaller.