Germany is set to fulfill the deficit rules spelled out in the yet unratified Fiscal Compact in 2013, Finance Minister Wolfgang Schaeuble said in an interview with the Frankfurter Allgemeine Sonntagszeitung.

In the interview to be published tomorrow, Schaeuble dismissed fears expressed by Germany’s states that the treaty enforces deficit rules that are too strict. By next year, Germany will already have a composite deficit that takes the three levels of government into account, he said.

Schaeuble in the interview urged the states to back the compact -- an international treaty -- in the upper house of parliament where they are represented. The chamber is dominated by opposition-led states who say the plan will force them to run balanced budgets from 2014, conflicting with a national rule that gives them until 2020.

The compact requires its signatories to limit their so- called structural deficits to 0.5 percent of gross domestic product by the medium-term. Structural budgets refer to regular government accounts that are stripped of one-off outlays such as disaster relief or stimulus spending adopted when an external shock causes economic growth to plunge.

To contact the reporter on this story: Brian Parkin in Berlin at bparkin@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net