German cabinet approves 2015 budget

BERLIN, July 2 (Reuters): German Chancellor Angela Merkel's cabinet approved a 2015 budget plan on Wednesday which for the first time in over four decades includes no net new borrowing, according to participants.

Low unemployment levels and steady growth have produced record tax revenues, while rock-bottom interest rates have reduced the financial burden of servicing Germany's federal debt load of 1.3 trillion euros.

This virtuous circle will allow the government to cover an estimated 300 billion euros in spending next year without issuing new bonds - the first time it would do so since 1969.

German Finance Minister Wolfgang Schaeuble is due to present the budget at a news conference later on Wednesday. It will then go to the Bundestag lower house of parliament, which is expected to approve it in November.

Over the next three years, the government expects its debt as a percentage of gross domestic product (GDP) to fall from nearly 80 per cent to under 70 per cent.