Berlin  - Germany's parliament voted Friday to broadly ban government deficits from the year 2020 onwards, albeit with some limited exceptions.

Finance Minister Peer Steinbrueck welcomed the 418-109 vote as "historic." The broad margin more than met a requirement for a two- thirds majority, which was needed since the change amends the constitution.

He said the Bundestag's decision would boost Germany's creditworthiness on world financial markets at a time when Berlin is soaking up 330 billion euros annually in new loans to counter the recession.

The federal and 16 state governments will continue to borrow vast sums to build roads and schools and pay welfare, but are supposed to retire older debt at the same time, so that net borrowing recedes to zero.

While leftist critics said the constitutional change would limit the power of government to aid the poor, conservative critics said the exemptions were so broad that the habit of deficit spending and the constant increase in public debt would continue.

The federal government, which has long had a goal of ending deficit spending, would allow itself leeway to increase annual net federal borrowing by 0.35 per cent of Germany's gross domestic product (GDP), or about 8 billion euros (11 billion dollars) in today's terms.

The amendment, taking effect in 2011, would ban the 16 states from increasing their net borrowing after 2020. The change must still be approved by the Bundesrat, the upper house of parliament, and approved by the president.

Extra borrowing will be allowed during recessions, but governments are required to reduce debt in good times.

The amendment was voted through by Chancellor Angela Merkel's Christian Democrat and Social Democrat coalition, with the Greens and the Left Party opposed and the Free Democrats abstaining.(dpa)