Budget policy: German state saves 53 billion euros of debt away

Finance Minister Scholz is because of his budget policy partly decried as Knauser. But the so-called debt brake works: The state has recently cleared its liabilities clearly.

Federal, state, local and social insurance liabilities to banks or private companies were 2.7% lower at the end of last year than a year earlier. According to preliminary data from the Federal Statistical Office, total liabilities amounted to 1914.3 billion euros.

Debt reduction therefore affected all areas of public finances:

  • The federal debt fell by 29.1 billion euros or 2.3 percent to 1213.4 billion euros.
  • The countries stood at the end of 2018 with 570.7 billion euros in the chalk. All states except Hamburg, Schleswig-Holstein and Bremen were able to reduce their liabilities.
  • The debts of the municipalities sank in comparison to the last quarter of the previous year by 5.6 per cent to 129.7 billion euro. The declines in Hesse, Saxony and Thuringia were particularly strong, while in Lower Saxony and Baden-Württemberg the debts of the municipalities and municipal associations rose.
  • Social security stood at the end of the year with 400 million euros in the chalk. This was eight percent less than a year earlier.

The state is currently benefiting from strong domestic activity, record employment and higher wages. As a result, tax and premium income increase. At the same time, low interest rates on the cost side relieve.

The rather economical budget policy of Finance Minister Olaf Scholz (SPD) is not undisputed. Business representatives repeatedly demand that the statutory debt brake be loosened and more money invested in infrastructure and other future projects.

REF: http://www.spiegel.de/wirtschaft/soziales/deutschland-schulden-schrumpfen-um-53-milliarden-euro-a-1259678.html