Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Trump signs executive order on changing name of Department of Defense to Department of War
Syrian media: A car bomb detonated in Al Mashhad Street in Aleppo, potential casualties reported
Lebanese government: The army will act within the framework of the relevant decision during the August 5 session, but it has the right to exercise operational discretion
Lebanese government: The Army Commander outlined the restrictions related to the implementation of the plan, the first of which is Israeli attacks
Lebanese government: The Lebanese Army will begin implementing the plan under the available capabilities
Lebanese government: Any progress in implementing the US envoy's paper is contingent on the Israeli side's commitment
Lebanese government: Lebanon approved the paper's objectives in the cabinet and prepared the army's plan, but the Israeli side did not take corresponding steps
Lebanese government: The US envoy’s paper stipulated coordinated steps from all parties, and its implementation is contingent on the approval of the concerned parties
Lebanese government: 'Israel's' continued violations expose regional security and stability to grave risks
Lebanese government: The army command will submit a monthly report to the Council of Ministers

Germany’s public debt spending expected to double

  • By Al Mayadeen English
  • Source: Agencies
  • 16 Jul 2022 11:03
3 Min Read

In order to finance government loans, the country will have to spend an additional €14 billion due to inflation.

  • x
  • Germany’s public debt spending set to double – media
    Germany’s public debt spending set to double – media

Due to increasing inflation, servicing government loans in 2023 would cost Germany about twice as much as it does now, German media group Redaktionsnetzwerk Deutschland (RND) said on Friday, citing data from the country's finance ministry on next year's budget.

An error in previous governments' inflation forecasts will cause Germany's interest payments on its public debt to rise from €16 billion ($16.09 billion) to nearly €30 billion next year, as the federal government has been issuing bonds linked to the inflation rate in recent years, according to the report. 

Berlin misjudged the risk of inflation increase, and as a result, it is now required to provide far bigger sums to service these bonds, according to the news outlet. 

“According to the documents for the draft budget for 2023, around €7.6 billion must be reserved for the repayment of so-called inflation-linked bonds in the coming year. This is €3 billion euros more than this year and almost €7 billion more than last year when inflation was still low,” RND reports.

Read next: Scholz demolished in 200 days what Germany built in 30 years: magazine

The sum of such indexed government loans is currently around €65 billion, which is a little under 5% of the country's total public debt of €1.5 trillion, according to the German Debt Office. However, the ratio of these loans to interest payments is significantly disproportionate, amounting to approximately 25%.

Related News

US dollar outlook: Short-term gains, long-term losses from tariffs

Dollar slips amid inflation fears, Trump-Putin ceasefire talks

According to the research, banks, insurance companies, and entities that have made loans to the German government will benefit the most from the situation since they will earn more money in interest payments. However, German taxpayers are unlikely to be thrilled because the interest would be paid with their money.

Read next: German company Uniper faces bankruptcy after Russian gas cut-off

“Betting on infinitely low inflation rates when taking on debt was a mistake that is now becoming very costly for taxpayers,” Dietmar Bartsch, leader of the Left faction of the German Parliament, said, commenting on the situation. He also demanded an investigation into the debt policies of the previous governments.

Nonetheless, despite the high cost of inflation-linked bonds, Germany's government debt expenditure is expected to climb in the future years, according to RND, because interest rates are expected to rise as Europe attempts to combat an economic crisis. The European Central Bank (ECB), for example, is likely to raise interest rates later this month for the first time in 11 years.

Highest inflation rates since 1973

German statistics office Destatis reported another hike in food and energy prices as inflation continues. Europe’s top economy, Germany, has reached 7.9%, the highest level since the 1973 oil crisis.

The surge came as the Ukraine war resulted in the collective-West imposing unprecedented sanction packages on Russia. The sanctions imposed on oil and gas hit Europe the hardest and consequently impacted inflation rates the most since late February said Destatis.

The agencies also pointed out that “another factor with an upward effect on prices” is the Covid-19 pandemic and all the supply chain interruptions it had caused throughout a period of two years. 

  • inflation
  • Germany
  • European Union

Most Read

Al Mayadeen English

Hezbollah’s weapons and the lessons of Syria, PLO, and Algeria

  • Politics
  • 2 Sep 2025
This Jan. 31, 2019 file photo, shows an oil platform in the Leviathan natural gas field, in the Mediterranean Sea off the Palestinian coast. (AP)

Netanyahu freezes $35 bln gas deal with Egypt over troops in Sinai

  • Politics
  • 2 Sep 2025
The Coming War On Iran Will Be Regional, Perhaps International

The coming war on Iran will be regional, perhaps international

  • Opinion
  • 2 Sep 2025
ap

Germany blocks EU push to sanction 'Israel' over war on Gaza

  • Politics
  • 31 Aug 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
Senators demand end to GHF amid ethnic cleansing allegations
Palestine

Democratic senators call GHF Gaza aid scheme deadly, urge funding cut

Finnish flag in an undated photo (AFP)
Politics

Finland backs UN declaration supporting 'two-state solution'

UN Probe: Sudan’s RSF committed ‘myriad crimes against humanity’
Politics

Sudan’s RSF committed ‘myriad crimes against humanity’: UN probe

How a secret SEAL team 6 mission in North Korea collapsed under fire
Politics

How a covert US SEAL Team 6 mission in DPRK collapsed under fire

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS