Experts have indicated that in 2006 and 2007, state coffers may see between 35 billion euros and 40 billion euros ($45 billion to $57 billion) more in tax revenues than were planned into the budget last May.

The expected funds have triggered a debate about how to use the additional resources, and still others have warned that it is precipitous to plan spending before the tax estimates are out:

Since it came into office, the government has passed a series of social and economic reforms that have taken away a big chunk of income from many Germans.

Suggestions by Merkel, Stoiber

Now the government obviously feels under pressure to ease the financial strain on ordinary citizens. In a first comment, Chancellor Angela Merkel indicated expected increased tax revenues of up to 25 billion euros this year alone could be used to lower people’s social contributions, which are automatically deducted from monthly pay checks.

The chancellor’s suggestion has been eagerly taken up by a number of conservative leaders, including the premier of the southern state of Bavaria, Edmund Stoiber. He wants the money to be used mainly to lower compulsory unemployment insurance contributions.

Others feel a substantial proportion of the windfall should go towards decreasing public health insurance premiums -- or at least keeping them stable.

It's the bad conscience of the government speaking: Voters were promised in the 2005 election campaign that a complete overhaul of the health system would bring about a substantial reduction in premiums. But last month's health reform bill will clearly lead to premiums going up.

Another good use: EU stability

Finance Minister Peer Steinbrück has his own ideas about how to use the unexpected revenues. Eager to cut a good figure in Brussels, he wants to make sure Germany can reduce some of its embarrassingly high public debt by lowering fresh borrowing next year and beyond.

A spokesman for the chancellery, Thomas Steg, suggested that in the end, Germany will see a mixture of proposals.

"It will remain a top priority for us to reduce fresh borrowing to ensure that we meet the criteria of the EU Stability Pact," he said.

"We’re still laboring under structural budgetary deficits and we have to reduce the gap between revenue and expenditure," Steg added. "I’d say the government doesn’t have much leeway to opt for a laxer spending policy. Nevertheless, I’m certainly aware of Chancellor Angela Merkel’s indication we might be able to lower social contributions. I personally wouldn’t risk any assessment as to whether we can afford to lower contributions as soon as next year.”

Warning on "guesswork"

But finance ministry spokesman Stefan Olbermann says he is wary of taking a stance on any debate before the real figures are on the table:

"If you take a closer look at the newspapers which have reported on the expected increase in tax revenue, he says, you’ll immediately see that the figures they’ve cited are anything but identical, to say the least. I take this as a strong indication that there’s a lot of guesswork involved and that the real figures may be quite different. So let’s not count our chickens before they are hatched."

The tax estimates will be officially presented in Berlin on Friday. On the same day, coalition leaders are to meet in the chancellery to agree on the best way of using the expected tax gains.