Germany's government used its slim lower house majority on Friday to push its 2005 budget through parliament two months late, with the opposition saying the deficit was being masked with a "firesale" of state assets. The 2005 budget aims to halve German new borrowing this year to 22 billion euros, mainly with the help of record privatisation receipts of over 17 billion euros.

The budget will also open the way for Germany to issue foreign currency bonds for the first time since 1945, although the finance ministry has not yet said whether it will make use of the possibility.

Berlin hopes the budget will be enough to bring Germany's total public sector deficit - which also comprises shortfalls at lower levels of government - back in line with European Union rules, which Germany has broken for three years in a row.

However, Germany's conservative opposition says the goal will not be achieved and has accused the Social Democrat-Green government of clutching at short term measures instead of tackling the country's underlying budgetary problems.

The budget was due to be passed by the end of last year. Earlier on Friday the upper house of parliament rejected the draft forcing the government to overrule it in a lower house vote.

Copyright Reuters, 2005