• Germany's news in English

German bonds garner top rating as Greece wavers

AFP · 9 Dec 2009, 15:39

Published: 09 Dec 2009 15:39 GMT+01:00

Facebook Twitter Google+ reddit

S&P affirmed the "AAA" long-term and "A-1+" short-term sovereign credit ratings of Europe's biggest economy, which serves as a benchmark for other European countries.

"Germany's track record of prudent economic and budgetary policies continues, with a relatively modest fiscal deficit expected in 2009," a research note said.

"We expect fiscal consolidation and spending discipline to continue under the new government, following the temporary budgetary weakening in the wake of the recession," it added in reference to Chancellor Angela Merkel's new centre-right coalition.

On Tuesday, Dieter Engels of the German audit office warned however that the government would have to repair its budget in light of higher borrowing, and the government's own economic advisors have said it should take back "gift baskets" of planned tax relief.

On Tuesday meanwhile, S&P warned Greece that its sovereign debt could be downgraded if the government failed to clamp down on its growing deficit. Fitch Ratings subsequently downgraded its assessment of Greek debt, raising the cost of borrowing for officials in Athens.

On Wednesday, UniCredit fixed income strategist Luca Cazzulani told AFP the yield or interest on Greek bonds was 2.44 percent higher than on benchmark German bonds, which he said was "definitely much higher than a week ago."

European Union officials have issued a chorus of warnings to Greece, and S&P's rating of Germany hammered home the message that governments must keep their finances in order despite having to stimulate economies during the global economic downturn.

Story continues below…

Britain, Ireland and Spain are also seen as possible problem countries though the two former were expected to address debt issues in a pre-budget report and a formal budget to be unveiled on Wednesday.

In Germany meanwhile, "despite passing through a severe global economic contraction this year, the German economy remains resilient, thanks to years of corporate restructuring, wage restraint, and a high savings rate," S&P said.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Outrage over ruling on 'brutal' gang rape of teen girl
The now convicted suspects, sitting in court in Hamburg. Photo: DPA.

A 14-year-old girl was gang-raped and left partially clothed and unconscious in freezing temperatures. Now prosecutors are appealing the sentences for the young men found guilty, most of whom will not set foot in jail.

Dozens of Turkish diplomats apply for asylum in Germany
Demonstrators holding a giant Turkish flag protest against the attempted coup in Istanbul in July. Photo: DPA.

Since the failed putsch attempt in Turkey in July, Germany has received 35 asylum applications from people with Turkish diplomatic passports, the Interior Ministry confirmed on Wednesday.

Hertha Berlin fan club criticised for 'anti-gay banner'
Hertha BSC beat FC Cologne 2-1. Photo: DPA

A 50 metre fan banner apparently mocking the idea of gay adoption has overshadowed Hertha BSC's win in the Bundesliga.

Germany stalls Chinese takeover of tech firm Aixtron
Aixtron headquarters in Herzogenrath. Photo: DPA

The German government on Monday said it had withdrawn approval for a Chinese firm to acquire Aixtron, a supplier to the semiconductor industry, amid growing unease over Chinese investment in German companies.

Politicians call for tough sentences for 'killer clowns'
File photo: DPA.

Now that the so-called 'killer clown' craze has spread from the US to Germany, elected officials are drawing a hard line against such "pranks", with some threatening offenders with jail time of up to a year.

Nearly one in ten Germans are severely disabled
Photo: DPA

New figures reveal that 9.3 percent of the German population last year were considered severely disabled.

The Local List
Germany's top 10 most surreal sites to visit
The Upside-Down House, in Mecklenburg–Western Pomerania. Photo: Olaf Meister / Wikimedia Commons

From upside-down houses on Baltic islands to a fairy-tale castle near the Austrian border, Germany is a treasure trove of the extraordinary.

Bavarian critics back Merkel for Chancellor again
Photo: DPA

The Christian Social Union (CSU) have long delayed backing Angela Merkel as their candidate for Chancellor in next year's general election. But now key leaders are supporting her publicly.

Four taken to hospital after hotel toilet bursts into flames
File photo: DPA.

Four guests at a Nuremberg hotel were taken to hospital due to smoke inhalation early Monday morning after a toilet there burst into flames.

Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German towns, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd