German cabinet approves euro86.1 billion in fresh debt in 2010 budget

German cabinet approves 2010 budget

BERLIN — Germany’s cabinet has approved a budget for 2010 that foresees taking on record debt to help safeguard the country against the global financial crisis, the finance minister said Wednesday.

The new budget anticipates euro86.1 billion ($120.35 billion) in fresh debt, more than double the euro40 billion for the current year and the largest credit to be taken out by the German government since World War II.

Finance Minister Peer Steinbrueck defended the high debt as unprecedented but necessary to manage an economy the government predicts will shrink by 6 percent in the coming year.

“Of course that throws all of our budget calculations into confusion and leads to an unparalleled level of fresh debt that will hopefully remain unparalleled,” Steinbrueck said.

Steinbrueck expects to spend euro327.7 billion in the coming year, an increase of roughly 24 percent over the current budget.

The long-term financial plan foresees a gradual decrease in spending that would drop to euro313.5 billion by 2013.

The budget plans now go to both houses of parliament for approval.