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.

To contact the reporter on this story: Carolynn Look in Frankfurt at clook4@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Tony Czuczka

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