For the first time since 1969, Germany has managed to balance the federal budget, thanks to strong tax revenues and low interest rates.

Chancellor Angela Merkel had pledged to balance the budget in 2015, but the Finance Ministry announced last week that the task had been achieved a year ahead of schedule.

Peter Tauber, general secretary of Mrs Merkel’s Christian Democratic Union party, described the balanced budget as “a great success, sending a clear signal to the rest of Europe that Berlin is leading by example”.

He added: “This marks a turning point in financial policy. We’ve finally put an end to living beyond our means on credit.”

Christian Schulz, an economist at Berenberg Bank, said the German government had “staked a lot of credibility” on balancing the budget and could “reap a political dividend from voters, who are very keen on the German government not borrowing more”.

The number of people in work in Germany reached a record figure of 43.1 million in November, and the unemployment rate fell to 6.5%.