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Public debt swells

AFP · 11 Mar 2010, 15:42

Published: 11 Mar 2010 15:42 GMT+01:00

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That hiked the national debt to just over 70 percent of gross domestic product (GDP), close to the European average.

Germany's federal debt rose 6.9 percent to €1.1 trillion, due in large part to €36 billion linked to the government's €500-billion rescue package to prop up the country's stricken banks, the statistics office said.

Germany's 16 states recorded an even bigger rise meanwhile, with their debt soaring 8.5 percent to €526.3 billion owing in large part to losses at public regional lenders that were hit hard by the crisis. Municipal debt gained 3.0 percent to €112.1 billion.

The data were preliminary and would be finalised later this year, the statistics office said.

The only time that Germany, Europe's biggest economy, has posted a sharper rise was in 1995 as the government ploughed money into depressed former East Germany following German unification in 1990.

The 2009 level put Germany's debt to GDP ratio at 70.3 percent according to a calculation based on published data, below a finance ministry forecast of 73 percent.

It breaches the 60 percent ceiling in the European Union's Stability and Growth Pact however, while remaining below an estimated EU average of 73 percent published by the European Commission late last year. That rate climbed to 78 percent for the 16-nation eurozone.

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Debt has become a major issue since it emerged that countries like Greece and Italy have allowed theirs to climb to more than 110 percent of national output, helping fuel a crisis over eurozone debt and deficits.

German debt could be higher still in 2010, with the government planning to borrow around €85 billion this year, the most ever, to finance stimulus measures and cover higher welfare costs.

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Your comments about this article

18:31 March 11, 2010 by peschvogel
With over 54% of the budget devoted to social welfare, the end of the Bismarkian era has come. The future demographics are un aupside down tree where future kids cant support any debt issued today. In sum, Europe is dying and Germany is no longer a strong economy.
19:39 March 11, 2010 by 1FCK_1FCK
Public debt is supposed to increase during a recession/depression. It's the only way to get out of it. Ask any economist who isn't from Austria. To blame it on welfare just plays into the far-right's hands.
01:14 March 12, 2010 by peschvogel
I love the little guy who will die for the social cause. Bravo. You Yurps loving in the moment with your Bismarkian principals that are dying. But again, beep, your wrong!

If you understood "economics" and not unions, you would realize that Germany, unlike the US : ) cannt issue bonds to service the swelling of its public sector. If you read anywhere in Germany, cities are being forced to cut while 40% of the population enjoys Hartz IV. Ungloublisch! Westerwell, for all his flaws is good for Germany. This brings up this subject in a politcal debate i recently heard in the Bundestag of whats happening to the once precious, Sozialstadt!

Its over! You see, Germany cant issue enough future bunds to service its future public and social debt because they wont have the population to pay taxes to sevice this debt. You need a 2.11 fertility rate. Germany has a 1.3. In 20-25 yrs, Germany as you know is over. Unless the nationaist party returns, established Christ as a key member to the Govt and people start making kids. But I wouldnt expect something productive from the Germans, so lets abolish that thought.

This is not a recession in Germany. This is a depression and those lofty social benefits will go to Greece, Spain, etc to save the wonderfully and structurally sound Euro projekt. Unfortuanately, Europe is moving to a far right. Especially Germany. You think that chick in die linke with the green hair or whatever can win. Ha!

Look, Germany faces insurmountable and irreversible challenges like brain drain, xenophobia, export only, no consumerism, over regulation, bankrupt banking system, higher taxes, labor contract problems, union problems, etc, etc, etc. Europe is dying, Germany is dying, the social welfare state is DYING. It will not last this downturn. You will see riots in Germany as a TV show is coming in April how to deal with them.

Germans who are smart and hard working want out. Enjoy the EUSSR..
08:58 March 12, 2010 by mrsams
i hardly believe this "prophecy", so far Germany still one of the strongest economy in Europe, it has all the resources to recover not like other countries who are in deficit that are so stagnant and no resouces to help their economy to recover.

The most problimatic countries in europe are:greece,portugal, spain,italy ireland and uk.
16:41 March 12, 2010 by dbert4
"Europe is dying and Germany is no longer a strong economy. "

If Europe is dying America is dead, buried and rotting! But you, "peschvogel" and your Republican, Fox News pals can't take off the rose glasses. What a "tool" you are!
01:53 March 13, 2010 by peschvogel
Germany's economy is no loner strong. Fact! 2009 figures were a disgrace. The other problem Germany faces is the coming crisis. May that is:

1. Euro crisis

2. Banking Crisis - Basel 2

3. Sovereign Debt crisis (see #2)

4. Export crisis

5. No more Bismarkian welfare state

6. Infrastructure crisis - Koln, A5, etc.

7. Rating Agency crisis

And for Mr Sams who wittingly says "

The most problimatic countries in europe are:greece,portugal, spain,italy ireland and uk."

Well, then thats Germanys problems too because debt at these countries are held at German banks. Please revert to my list of #'s 1,2,3,7.

And yes, fact, Germany is dying...Fox News, Republican, are you joking me?

Have you seen our President? You Germans LOVED him in Berlin. He is helping Europe out so much. NOT! He is wise to stay away from the massive troubles of Europe....Gans genau!

22:11 March 13, 2010 by dbert4
1. Euro crisis - Compared to the US dollar or the pound, they're doing fine.

2. Banking Crisis - Basel 2 - Oh PLEASE the US banks invented this problem

3. Sovereign Debt crisis (see #2) - Oh gee don't know, ask the Chinese

4. Export crisis - The US manufactures NOTHING, the Germans still manufacture everything that counts. If the Chinese are exporting a few more of the poision products than the Germans are their high quality, hight tech items. Blame the dumb ass Americans for buying it.

5. No more Bismarkian welfare state - Too stupid to mention

6. Infrastructure crisis - Koln, A5, etc. - the whole US is falling apart PLEASE

7. Rating Agency crisis - ???? The "rating agencies" are all corrupt American ones that are giving fictious ratings to their American banking pals, better to purpetrate their fraud upon the rest of the world.
02:57 March 14, 2010 by peschvogel
You are living in a welfare state of denial and malaise. You think you are comfortable. You are not ready for the crisis which will leave your broke and looking for a job to pay your bills. US banks hold more capital so they wont have anything near what you are about to witness. Sit back, have a doner and enjoy. Your social welfare state is over. kaput. Laws are being drafted now to rid itself of its baggage by using foreigners to pay for pensioners. The 3 "American" Rating agencies will continue to be used as the source of unbiased bond rating opinions. You are living in malaise and denial and have no idea whats about to hit you!
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