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Electricity meter in apartment building: AAA rating

Photo: Bernd Wüstneck / dpa

The federal government will have to borrow significantly less money from investors this year than previously planned. In the upcoming fourth quarter, borrowing will be a total of 31 billion euros lower, said the finance agency responsible for debt management. This is due to "the lower financing requirements of the federal budget and its special funds, especially in connection with the measures taken by the federal government to cope with the energy crisis," it said.

Already in the third quarter, the Finance Agency collected 14 billion euros less from investors than initially planned. This means that the total amount for the year is around 45 billion euros lower than targeted at the end of 2022.

The reason: Due to low energy costs, the federal government has to spend significantly less money than feared for the price brakes for electricity, gas and district heating. In total, the government has reserved up to 200 billion euros for electricity and gas price brakes and the stabilization of utilities until spring 2024.

Nevertheless, a record level would be reached with the expected half a trillion euros that the federal government will borrow from investors this year. In addition to the expenses for the energy crisis, the money will also be used to plug the expected deficit in the budget of Federal Finance Minister Christian Lindner (FDP). In addition, the federal government has to pay back money to investors for securities worth more than 300 billion euros – more than 81 billion euros in the upcoming fourth quarter alone. For this, refinancing is needed.

The major rating agencies rate Germany's creditworthiness with the top rating AAA. This signals to investors an extremely low risk of default when they lend money to the German state. The latter, in turn, benefits from the "triple-A" status, as he receives loans on comparatively favorable terms.