Germany's true debt burden increased by 261.5 billion euros - ZEW study

Germany's true debt burden increased by 261.5 billion euros - ZEW study

Germany's mountain of debt amounts to around 2.62 trillion euros, with an increase of 62 billion euros compared to the previous year. This corresponds to 63.7 percent of nominal gross domestic product, as published by the Bundesbank at the end of March. Nevertheless, there is criticism from economists at the European Center for Economic Research (ZEW) and the Strube Foundation, who claim that Germany's actual debt level is ten percent higher than officially stated.

The reason for the discrepancy is that the European Union (EU) debt is not taken into account in the national data. A ZEW study has shown that Germany's debt is 261.5 billion euros larger than expected, which corresponds to almost six percent of Germany's gross domestic product. The researchers emphasize the importance of taking EU debt into account when calculating member states' public debts in order to improve fiscal transparency.

In particular, the EU's measures to deal with the consequences of the corona pandemic have led to an increase in German liabilities. The EU development programs such as “Next Generation EU” (NGEU) have contributed to Germany having to assume financial obligations totaling 750 billion euros. Germany will receive various shares, including the repayment of grants and programs as part of the reconstruction plan as well as guarantees for other member states.

Overall, it is clear that Germany's mountain of debt is much higher than expected, which is particularly due to the influence of EU debt. Ensuring transparency and accuracy in the calculation of public debt to enable sound economic policy remains a challenge.