German Pandemic response creates record public debt

style="float: right; margin-bottom: 10px; font-weight: 600;"Tue 22nd Dec, 2020

The poor financial handling of the pandemic has caused German public debt to reach record levels, with the highest absolute increase at the state level in North Rhine-Westphalia.

The claim is that public debt in Germany has risen to record levels due to Corona costs. The federal government, states, municipalities and social security, including all extra budgets, were 2195.1 billion euros in debt at the end of September, according to the Federal Statistical Office. That is 15.6 percent, or 296.4 billion euros, more than at the end of 2019. "The increase is mainly due to the borrowing of financial resources for measures to deal with the Corona crisis," the statisticians explained. Coupled with a drastic reduction in tax revenue due to the effects of short-sighted lockdown policies, the financial situation is looking grim.

Liabilities had fallen every year since the end of 2012, before the first increase was recorded again this spring because of Corona. With the exception of Social Security, all levels had more debt at the end of September than at the end of 2019, with the federal government's debt increasing the most during that period: It increased by 20.3 percent, or 241.5 billion euros, to 1430.1 billion euros. "Securities debt rose particularly sharply, by 207.4 billion euros," it said.

The states had a debt of 631.1 billion euros, an increase of 9.1 percent or 52.4 billion euros. "Debt increased in all states," the statistics office said. In percentage terms, it increased the most in Saxony, where debt increased 2.7 times from a low level, followed by Bavaria (+26.5 percent) and Bremen (+20.8). The states with the highest absolute increases were North Rhine-Westphalia (+16.4 billion euros), Bremen (+6.3 billion euros) and Lower Saxony (+5.0 billion euros).

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