Germany’s austerity drive aims at €10bn annual cuts

Faced with a budget deficit of £71bn for the current year, German chancellor, Angela Merkel, has warned that the country can no longer live beyond its means and that deficit would need to be reduced by €10bn a year until 2016.

Wirth this objective in mind, Merkel has begun a series of meetings with ministers that will seek to work out a savings plan which could include unwelcome measures such as reducing federal staff, lower social welfare benefits as well as tax increments.

These are part of efforts being made by European leaders to get the eurozone's massive debt problems under control.

For 2010, Germany faces a budget deficit in excess of €86bn and says it needs to cut at least €10bn annually until 2016.

"The main concern of citizens is that the national deficit could take on immeasurable proportions," said finance minister, Wolfgang Schäuble.

At her end Merkel stressed that Germany could no longer live beyond its means, saying "...we can only spend what we take in".