Merkel Party Head Says Balanced-Budget Goal Remains in Force

(Bloomberg) -- The head of Chancellor Angela Merkel’s party said Germany doesn’t need deficit spending to combat climate change, though incentives to reduce carbon emissions should be overhauled.

Ensuring sustainability includes a balanced budget as well as policies that lead to “climate neutrality,” Christian Democratic Union chairwoman Annegret Kramp-Karrenbauer said in a column in the Welt am Sonntag newspaper. She suggested capping CO2 emissions for vehicles and buildings while easing German taxes and other levies on energy and increasing incentives for clean-energy upgrades.

The Finance Ministry said Thursday there’s no government decision to abandon Germany’s balanced-budget policy. Reuters, citing a government official it didn’t identify, reported earlier that Germany was considering issuing new debt to fund measures against climate change, leading bunds to spike lower.

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