Merkel’s election hopes boosted with €18.3bn surplus

GERMANY achieved a near record budget surplus of €18.3bn (£16.8bn) in the first half of 2017, according to government figures released yesterday.

The timing of the figures could not be better for Angela Merkel, who is seeking a fourth term as chancellor in elections next month.

The surplus is the second largest recorded since reunification in 1990. It recorded an even bigger surplus of €28.8bn in the second half of 2000, but that was boosted by a windfall from the sale of mobile phone licences.

By contrast, the surplus for the first half of 2017 was fuelled by higher tax revenues than expected, as the German economy continues to perform strongly. Unemployment fell to 3.8pc in June, when measured by the International Labour Organisation standards used in the UK.

High government spending on housing and integration for the more than one million asylum seekers arriving in Germany since 2015 is also believed to have driven the strong figures.