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Germany won't reallocate energy crisis funds - finance minister

FILE PHOTO: German liberal party FDP holds its traditional annual Epiphany meeting in Stuttgart

BERLIN (Reuters) - Germany might not use the full 200 billion euros ($217.50 billion) earmarked for the government's response to the energy crisis, Finance Minister Christian Lindner said, while ruling out using any leftover funds for other purposes.

"My hope was always that we would not use the full amount," Lindner said in an interview with the Westfalen-Blatt newspaper published on his ministry's website on Tuesday.

Germany's spending on gas and electricity price caps, designed to help households and businesses shoulder soaring energy bills, could be lower than expected due to falling energy prices.

Lindner said in the interview the relief measures could cost "significantly less than feared".

The 200-billion-euro fund is not part of the general federal budget. "As a result this means loans not needed for the crisis measures will lead to an overall reduction in state debt - and so these funds cannot be reallocated," he said.

"We must now ensure that the state budget grows out of the current deficit and that the state's debt ratio falls again," the finance minister said on Twitter.

Germany first suspended its constitutionally enshrined debt brake in 2020 to fund spending in response to the COVID-19 pandemic. The government hopes to comply again this year with the debt brake, which limits the budget deficit to 0.35% of gross domestic product.

($1 = 0.9195 euros)

(Reporting by Christian Kraemer, writing by Maria Martinez, editing by Rachel More, Kirsten Donovan)