In 2007 the federal state of Berlin had a budget surplus for the first time in its history. The surplus will be used to reduce Berlin’s existing debt (roughly €60 billion). Budget forecasts anticipate surpluses over the next few years as well, and the state’s existing debt is to be reduced by €1.8 billion by 2011.
Berlin’s financial situation is heavily influenced by high debt and correspondingly high interest payments. For years now, the Senate has been working to meet this challenge with a consistent budget consolidation course. As a result, in 2006, primary income (i.e., not including loans or the sale of assets) was able to cover primary spending (i.e., not including interest) for the first time since German reunification.
