BERLIN Jan 12 Germany's federal government
posted a budget surplus of 6.2 billion euros ($6.60 billion)
last year, helped by a strong economy and low borrowing costs,
senior government sources said on Thursday, adding they wanted
to use the windfall to amortize debt.
It is the third consecutive year Europe's biggest economy
has not needed net new borrowing. The 2015 federal surplus was
12.1 billion euros, said the sources.
"We want to suggest to the lower house of parliament that
this money is used for amortizing debt," said one senior
In an election year, the surplus has triggered a debate
among Chancellor Angela Merkel's conservatives and her Social
Democrat (SPD) coalition partners over whether the windfall
should be used to pay off old debt or raise public investment.
Some Bavarian conservatives have called for tax cuts.
"We should give citizens something back. In view of low
interest rates and rising inflation, we need quick tax
reductions," Markus Soeder told Bild daily.
The senior government sources said the government wanted to
send a signal to European and international partners that having
a budget surplus is not at odds with achieving growth.
"We are showing that both are possible," said the source.
The German economy grew by 1.9 percent in 2016, the
strongest rate in five years, the Federal Statistics Office said
($1 = 0.9398 euros)
(Reporting by Gernot Heller; Writing by Madeline Chambers;
Editing by Paul Carrel)