For some time now, public debt in Germany has only been heading in one direction – downwards. Now the situation has changed. As recent data from the Federal Statistical Office show, total public debt in Germany (federal, state, local and social insurance) will rise by 0.7% in the third quarter of 2019 compared with the end of 2018. They rose from 1.916 to 1.930 trillion Euros.
This results in a two-part picture. While municipalities, the federal government and social security funds are not incurring any new debts, the federal states are raising the overall average by 3% in just nine months. It has been praiseworthy to mention for some time that Saxony is constantly approaching complete debt relief in large steps. In the last nine months alone, the debt burden was reduced by 15.6% to only 1.19 billion Euros. Bavaria is there with -8%. City states such as Hamburg and Berlin were also able to reduce their debt burden slightly.
But the federal state of Bremen really shoots the bird. In just nine months, the state’s debt burden rises by 42.8% from 23.9 to 31 billion Euros. What happened there? Even the worst finance minister can’t spend money that fast? The statisticians provide detailed explanations. More negative than in Bremen is probably the development in Saxony-Anhalt and NRW, because there is an increase in real structural debt there. Quote:
In Bremen, debt rose by 42.8 %, in Saxony-Anhalt by 8.2 % and in North Rhine-Westphalia by 4.4 %. The strong increase in Bremen was mainly due to borrowing for the provision of cash collateral for derivatives. In Saxony-Anhalt and North Rhine-Westphalia, the growth is mainly attributable to the raising of new securities debt in the core households.
The federal states are now the driving forces behind the rise in public debt. If the federal government soon joins the group because of the end of the bright period thanks to economic problems, debt will continue to rise.