• Germany's news in English
 
app_header_v3
Germany ‘must act now to defuse debt time bomb’
Finance Minister Wolfgang Schäuble had some grim reading in his briefcase this week. Photo: DPA

Germany ‘must act now to defuse debt time bomb’

The Local · 12 Feb 2016, 15:36

Published: 12 Feb 2016 15:36 GMT+01:00

It’s the same old problem: not only Germans are living longer than ever before, they’re not producing enough offspring to replace them in the workforce.

The result will be levels of debt reaching 220 percent of Gross Domestic Product (GDP) by 2060 - well above the 60 percent limit for EU member states set out by the Maastricht Treaty in 1992 - experts from inside Wolfgang Schäuble's finance ministry have calculated.

The report is likely to be of particular concern to Schäuble, Germany's stern faced Finance Minister, who has blasted other European countries for their unsustainable levels of debt - and insists on Germany sticking to the "schwarze Null" (black zero) - a policy of having zero deficit.

There are “serious risks to the sustainability of debt” the report warns, adding that if the government doesn’t act now, it will lead to “an unbearable debt build up which will limit the state’s ability to act.”

Short of an unlikely upturn in the birth rate in Germany - it has one of the lowest in the world - the finance wonks argue that the only way to avoid Germany’s impeccable budget figures turning red is to start cutting its debt burden now.

But to do this would require budget cuts in the region of €7 billion a year, starting immediately - and that’s according to the finance report's more optimistic scenario for the future.

Should their more pessimistic predictions come true Germany would need to start saving around €23 billion annually.

Story continues below…

The report remains unpublished and is set to be discussed by the cabinet in the coming weeks.

SEE ALSO: Five reasons why Germany is so worried about Deutsche Bank

For more news from Germany, join us on Facebook and Twitter.

The Local (news@thelocal.de)

Your comments about this article

Today's headlines
Deutsche Bank denies asking Merkel for state aid
Photo: DPA

Deutsche Bank on Wednesday denied rumours it had sought state aid and announced the billion-euro sale of its British insurer Abbey Life, in a bid to reassure investors spooked by a potentially massive US fine.

Munich at high risk of housing bubble: report
A view of Munich. Photo: Pexels.com

Considering buying property in Munich? This report might make you think twice.

After fatal hail storm, south Germany set to see sun
The hail storm in Baden-Württemberg on Monday night left the streets looking like a winter landscape. Photo: DPA.

A hail storm in southwest Germany on Monday night led to the death of one woman, but forecasters predict a bit more sun in the days to come.

Police shoot dead father who attacked daughter's abuser
Police at the scene of the shooting in Berlin. Photo: DPA.

Berlin police on Tuesday night shot and killed the father of a young girl at a refugee home as he tried to attack a man who allegedly sexually abused his daughter.

TV celebrity criticized for claiming 70 kg is overweight
Sophie Thomalla. Photo: DPA

Model Sophie Thomalla claimed that promoting models who weigh over 70 kg sets as dangerous an example as skinny supermodels.

UK files show how Spanish spy tricked Nazis over D-Day
Photo: DPA

Secret files released in Britain Wednesday shed new light on how a Spaniard dubbed the greatest double agent of World War II tricked Germany with false intelligence about the D-Day Normandy landings.

Pegida take to Dresden streets - to march against Pegida
Pegida demonstrators. Photo: DPA

Followers of the xenophobic Pegida movement marched in two factions on Monday evening in the capital of Saxony, brandishing fierce accusations of treason against one another.

Analysis
Is it fair to call the AfD far right?
AfD leaders, from left, Georg Pazderski, Frauke Petry and Jörg Meuthen. Photo: DPA.

The AfD has been dubbed "far-right" over the past year as it has taken on a tougher stance against immigration and made gains in state elections. But at what point does one call a group far-right?

Dresden police guard Islamic buildings after mosque attack
The Dresden mosque that was hit by a homemade bomb attack on Monday. Photo: DPA.

All Islamic buildings in the capital of Saxony have been put under police protection on Tuesday after explosive devices were detonated at a mosque and a congress centre in the city.

Germany blocks WhatsApp data transfers to Facebook
Photo: DPA

German data protection authorities on Tuesday said they had blocked Facebook from collecting subscriber data from its subsidiary WhatsApp, citing privacy concerns.

Sponsored Article
The Inner Circle: the secret to dating in Berlin
Lifestyle
15 pics that prove Germany is absolutely enchanting in autumn
Sponsored Article
Why Jordan is the ‘Different’ East
Lifestyle
10 German films you have to watch before you die
Lifestyle
6 things about Munich that’ll stay with you forever
Lifestyle
10 pieces of German slang you'll never learn in class
Sponsored Article
Retiring abroad: ensuring your health is covered
National
Seven great reasons to stay in Germany this September
National
Ouch! Naked swimmer hospitalized after angler hooks his penis
National
Six reasons why Berlin is now known as 'the failed city'
National
15 tell-tale signs you’ll never quite master German
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
Culture
7 American habits that make Germans very, very uncomfortable
Rhineland
Story of a fugitive cow who outwitted police for weeks before capture
Sponsored Article
The Inner Circle: the secret to dating in Berlin
Culture
Eleven famous Germans with surnames that'll make your sides split
Lifestyle
The best ways to get a visa as an American in Germany
Gallery
Germany's 17 Olympic gold medals in pictures
14 facts you never knew about the Brandenburg Gate
Society
Ten times Germans proved they really, really love beer
National
Six things you need to know when moving to Germany
Travel
These 10 little-known German towns are a must see
International
German scientists prove birds can sleep while flying
Technology
London v. Berlin: Which is better for startups?
Lifestyle
13 mortifying mistakes German learners always make
Travel
Enter if you dare: Berlin's best abandoned haunts
Lifestyle
10 rookie errors all Brits make when they arrive in Germany
6,591
jobs available
Toytown Germany
Germany's English-speaking crowd