Revenues up, but debt too

The German government, the country's 16 states as well as its communities all logged their biggest ever piles of public debt in the first three months of this year, the National Statistics Office (Destatis) reported on Monday.

Together, they'd run up debt to the tune of 2.042 trillion euros ($2.530 trillion) by the end of March, up 42.3 billion euros year-on-year.

"The German state is not ambitious enough in its cost-saving endeavors," said Alfred Boss, a taxation expert with the Kiel Institute for the World Economy (IfW). "It's simply sitting back and enjoying soaring tax revenues."

Boss alluded to the fact that Germany generated a 3.6-percent rise in revenues in the first quarter, after already enjoying increasing flows into state coffers throughout the whole of 2011.

No model student, after all

Analysts criticized that the spending spree was far from over, mentioning that this year alone Germany's fresh borrowing will increase by another 32.1 billion euros, after a 17.3-billion-euro surge in the previous year.

Destatis statisticians said the federal state had piled up the biggest debt load, adding another 12.5 billion euros in the first quarter to the well over one trillion euros in debt already amassed before.

But regional communities also increased their debt piles by 4.7 percent in the same period. The managing director of the German Association of Cities and Towns, Stephan Articus, on Monday welcomed a deal struck with Berlin that the federal government would take over a big chunk of costs that communities had been paying for pre-school centers and special services for disabled people. The agreement is widely seen as horse-trading to secure parliamentary approval later this week of the European Fiscal Pact. That EU debt deal requires a two-thirds majority in parliament, meaning the coalition is unable to push the bill through without opposition support.

hg/msh (Reuters, dapd)