German Defence Minister says steep budget cuts needed

HAMBURG, Germany Thu May 27, 2010 1:12am IST

German Defence Minister Karl-Theodor zu Guttenberg awaits the start of a board of inquiry in Berlin, April 22, 2010. REUTERS/Tobias Schwarz/Files

German Defence Minister Karl-Theodor zu Guttenberg awaits the start of a board of inquiry in Berlin, April 22, 2010.

Credit: Reuters/Tobias Schwarz/Files

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HAMBURG, Germany (Reuters) - German Defence Minister Karl-Theodor zu Guttenberg said on Wednesday that steep spending cuts were needed in his budget because of the federal government's dire fiscal situation.

"A symbolic cutting of a few individual acquisitions will not be enough," Guttenberg said after a speech to soldiers in Hamburg. "If one looks at the current numbers there is an urgent need for a paradigm shift."

Guttenberg said the military budgets in Germany will not be immune to spending cuts. He said, however, the German mission in Afghanistan should not be affected by cutbacks.

He said he planned to discuss other areas for possible cuts with Finance Minister Wolfgang Schaeuble.

During the euro zone debt crisis, Chancellor Angela Merkel has called for member states to cut budget deficits.

Germany itself is set to break the European Union limit by a wide margin, with its deficit seen exceeding 5 percent of gross domestic product.

The government is due to present the draft 2011 budget at the end of June. For the first time, it has taken into account a new "debt brake" law requiring the government to reduce the debt-to-gross domestic product ratio and cut the structural deficit by 10 billion euros, say experts.

The Organisation for Economic Cooperation and Development said Germany needed to cut spending to consolidate a budget balance that was set to deteriorate markedly in 2010.

Schaeuble told fellow cabinet members last week their initial spending proposals for the 2011 budget were far too high.

(Reporting by Jan Schwartz; writing by Erik Kirschbaum; editing by Stephen Nisbet)

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