Balanced Budget

On Wednesday, Steinbrück, a Social Democrat, is expected to present his budget proposal for 2008 to his cabinet colleagues for approval before the document heads to parliament.

While the financial plan for the coming year will still include new debt of about 13 billion euros ($17.5 billion), Steinbrück said that this is already 40 percent less than originally expected. The finance minister expects to spend 283.2 billion euros in 2008, up 12.7 billion euros compared to 2007.

By 2011, Germany will be able to do without borrowing more money, according to Steinbrück. He said he plans to use and budget surplus to reduce the country's debt of 900 billion euros. Currently, Germany pays about 40 billion euros per year in interest on its debt. An increase in interest rates will cost the country an additional 2.8 billion euros in 2008.

Too cautious?

Budget experts of Germany's conservative Christian Democratic Union (CDU), which forms a grand coalition with Steinbrück's Social Democratic Party, said that the finance minister's proposals didn't go far enough.

Steffen Kampeter, the budget expert for the CDU in parliament, said that Germany should already be able to borrow significantly less money in 2007 than expected. He also criticized that Steinbrück's plan aimed to reduce new debt via tax revenue rather than cutting costs.

Opposition members also attacked Steinbrück for not doing enough to save money and said that a balanced budget by 2011 was not ambitious enough.

"For him, the best would be to reach this all of a sudden in 2009," Otto Fricke, the chairman of the parliament's budget committee, told SWR public radio. "That's when we'll have the next election campaign at the latest."

Speaking to the Berliner Zeitung daily over the weekend, Steinbrück didn't exactly deny the allegation.

"What that be such a bad thing for the republic?" he asked.