(Adds Schaeuble quotes)
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,
and Finance Minister Wolfgang Schaeuble said he wanted to use
the windfall to amortize debt.
The conservative minister's comments are unlikely to please
Germany's European and other international partners, which have
long urged Berlin to use its robust public finances to stimulate
domestic demand to help revive the euro zone economy.
It is the third consecutive year that Germany, Europe's
biggest economy, has not needed net new borrowing, said the
finance ministry, adding that the 2015 federal surplus was 12.1
Schaeuble said the surplus was partly a result of special
circumstances, namely very low interest rates.
"So it is even more important to use these circumstances to
make provisions for the future," he said in a statement.
"I will suggest to the lower house of parliament that this
surplus of 6.2 billion euros is used to amortize debt," he
added, arguing that this would strengthen the long-term
sustainability of Germany's public finances.
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.
Senior government sources said Berlin wanted to send a
signal to European and other countries that having a budget
surplus was not at odds with achieving growth.
"We are showing that both are possible," said one 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 Gareth Jones)