Public debt rises to record high

Public debt rises to record high

This was 2.1 percent or 42.3 billion euros more than in the same quarter of the previous year, according to the federal statistical office in wiesbaden on monday. The two trillion mark had been exceeded for the first time in 2010.

The debt of the federal government and its extra budgets alone increased by 1.0 percent over the year to around 1.286 billion euros. The extra budgets include the financial market stabilization fund to rescue banks and the investment and redemption fund set up for the economic stimulus packages after the global financial crisis.

The countries’ debt mountain – cash loans, credit market debt and extra budgets – grew by 4.0 percent to 622.7 billion euros. With an increase of 4.7 percent, municipal debts rose the most in percentage terms. At the end of march, they had a deficit of around 133.1 billion euros (plus 6.0 billion). The share of cash loans, which are actually only intended to bridge payment bottlenecks in the short term, increased by 2.1 percentage points to 35.9 percent.

According to the debt brake in the basic law, the states are not allowed to incur any new debt from 2020 onwards. The federal government, on the other hand, still has some leeway. Finance minister wolfgang schauble (CDU), however, is aiming for a surplus for 2016 for the first time in more than 40 years and a budget without new debt, according to the draft financial plan to be approved by the cabinet this wednesday. Then the federal government also wants to start paying off the debt.

Schauble wants to meet the debt brake requirements, according to which the federal government’s structural deficit adjusted for one-time and cyclical effects may not exceed 0.35 percent of economic output, as early as 2013 – three years earlier than required.

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