Germany's 2020 budget set to rise by 1.1% - draft

BERLIN (Reuters) - Germany's federal budget will rise to about 362 billion euros (£312 billion) next year, a draft budget passed by a parliament committee showed on Friday, representing an increase of 1.1% from 2019 and sticking to a balanced budget.

The amount is 1.7 billion euros higher than proposed by Finance Minister Olaf Scholz.

The centre-left Social Democrat, who is junior partner of Chancellor Angela Merkel, can only keep the budget balanced by tapping a reserve that was meant to be used for the integration of migrants.

That set-aside has grown to more than 35 billion euros, of which 10.6 billion euros will be redirected to the regular budget next year, the draft showed.

About 7 billion euros are earmarked for incentives to cut carbon emissions, through measures such as insulating buildings, replacing ageing oil heating systems, and higher subsidies for buyers of electric cars.

The budget must still be passed by the full assembly of the lower house of parliament, the Bundestag. The decision is expected at the end of the month.

(Reporting Holger Hansen; Writing by Thomas Seythal; Editing by Clarence Fernandez)