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Bad bank finds €56 bln after checking sums

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Bad bank finds €56 bln after checking sums
Photo: DPA
10:20 CEST+02:00
German national debt has been slashed by nearly €56 billion at a stroke, after the books were checked at the ‘bad bank' of the nationalised Hypo Real Estate (HRE).

A spokesman for the bank's administrators, FMS Wertmanagement, confirmed a Friday report that cash securities had been subtracted from the relevant accounting entries – when they should have been added.

FMS has already corrected its balance for 2010, which is now healthier to the tune of €24.5 billion, while the first half results for this year will now show debts of €301.8 billion rather than the original €357.8 billion.

Weekly magazine Stern reported that because FMS accounts are included in the calculation of the German state, the government has registered the change in fortunes to European Union authorities. The mistake was so massive that the EU statistics body Eurostat had to publish a new overview of German figures.

However, the reprieve is likely to prove temporary as the planned write-down of Greek government debt is expected to cost Germany billions, although it is not yet known how badly this will affect FMS.

HRE was nationalised in 2009 after making bad investments amid the US subprime lending crisis.

DPA/The Local/hc

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