German net new borrowing will swell to a record 41 billion euros in 2006 but fall markedly the following year, the country's designated Finance Minister Peer Steinbrueck said on Saturday, according to Reuters. Speaking at a news conference to present the financial aspects of a new coalition agreement between the German conservatives and Steinbrueck's Social Democrats (SPD), he also said he was in talks with the Bundesbank about a sale of gold reserves to finance future investment projects. However, Steinbrueck said coalition plans for 25 billion euros in new investments were not dependent on the gold sale plan and conservative finance expert Michael Meister said the German central bank's independence would be respected in the talks. "A lot of details still need to be worked out. We're not there yet," Steinbrueck said. Steinbrueck confirmed reports on Friday that the government wants to sell part of the Bundesbank's roughly 3,433 tonnes of gold reserves and invest the proceeds in interest-bearing assets controlled by the bank. The interest would then be used to pay for research and development projects and would not flow into the federal budget. The Bundesbank has signalled in the past it would not accept such transfers to the budget. Steinbrueck also confirmed the government planned to tax all capital gains made by individuals on the sale of shares or real estate from 2007 at a 20 percent rate. Capital gains are currently tax free in Germany if shares are held for more than a year or if property is held for over 10 years.
