Crisis policies and interest rates increase the mountain of debt - impacting the financial situation.

Crisis policies and interest rates increase the mountain of debt - impacting the financial situation.

According to a report by www.n-tv.de,

The government is financing the high energy prices and the switch to public transport with billions, which is leading to increased government debt. At the same time, interest rates are rising, making loans more expensive. This led to a deficit of 91.5 billion euros in the first three quarters of the year.

The rising interest expenses, the expensive energy aid and the costs for the Germany ticket have caused the German state's mountain of debt to rise significantly. Revenue rose 6.1 percent to 1,337.8 billion euros, while expenses rose 7.7 percent to 1,429.3 billion euros. Energy aid such as the electricity and gas price brake for private households and companies had a particularly significant impact. The federal government, municipalities and community associations as well as social security were in the red.

The federal government's interest expenses rose almost three times compared to the same period last year to 39.4 billion euros. This is due, among other things, to the fact that the European Central Bank (ECB) raised its key interest rate to 4.5 percent. This also makes financing more expensive for the public sector. The interest burden on states and municipalities also increased significantly.

Another reason for the deficit is that the liabilities of transport companies in local public transport (ÖPNV) are now included in the calculation. This is due to the financing of the Deutschlandticket.

Despite the higher deficit, the Institute for Macroeconomics and Business Cycle Research (IMK) does not see this as an economic problem. The general government deficit in 2023 is expected to be well below two percent of gross domestic product and thus below the 2.5 percent recorded in 2022.

Overall, these figures show that the crisis and the associated government spending are having a significant impact on government debt and financing costs. This can be observed particularly against the background of an emerging slight recession in the German economy.