Duits begrotingstekort naar recordhoogte (en)

German finance minister Hans Eichel is reckoning with a record high deficit this year, according to the Süddeutsche Zeitung.

The newspaper reports that instead of the previously reported 29.3 billion euro, the deficit is expected to rise to 47 billion euro.

On Monday, German chancellor Gerhard Schröder sought to play down fears that the EU's largest member state may be relaxing its efforts to reduce its budget deficit.

The rumours started after a meeting of senior coalition figures last week in the Berlin chancellery, which apparently discussed shelving further spending cuts while growth remained weak, reports the Financial Times.

Under the rules governing the euro, countries may not run a public deficit higher than three percent of GDP.

The deputy leader of the Social Democrat (SPD) group, Ludwig Stiegler, has called for a European growth initiative.

"We will not get out of the economic problems by saving, but through growth", he told the Berliner Zeitung.

He suggested that Germany along with France or Italy should start a European growth initiative adding that when the new European Commission starts in November changes to the euro's stability pact should be considered.