German general government debt down in 2016 by €18 billion to €2.14 trillion – debt ratio down to 68.3%

General government debt in Germany as defined in the Maastricht Treaty fell by €18 billion in 2016 and amounted to roughly €2.140 trillion at the end of the year, €65 billion down on its peak in 2012.

The debt ratio, meaning the ratio of debt to nominal gross domestic product (GDP), recorded a year-on-year decrease of 2.9 percentage points to 68.3% – chiefly as a result of nominal GDP growth. Consequently, the debt ratio was well below its 2010 high of 81%. That said, it continues to significantly exceed the 60% ceiling enshrined in the Maastricht Treaty.

The deleveraging observed last year was attributable, in particular, to central and state government core budgets, which ran significant surpluses. The debt levels of local government and social security funds remained virtually unchanged. However, the surpluses also recorded here were reflected in an increase in financial assets rather than in deleveraging.

In a departure from previous years, government-owned bad banks did not contribute to further deleveraging; instead, they moved broadly sideways in this respect. While financial assets were realised further on balance, giving rise to deleveraging, this development was counteracted by factors such as an increase in debt due to the creation of a new government-owned bad bank to relieve the burden on HSH Nordbank. Support measures in favour of domestic financial institutions, which are reflected in the general government debt level, therefore amounted to a total of €226 billion (or 7.2% of current GDP) at the end of 2016. Assistance measures for euro-area countries accounted once again for €88 billion (or 2.8% of GDP).

Under the European budgetary surveillance procedure, the European Union's member states are required to submit data on their general government deficit and debt levels to the European Commission twice a year (at the end of March and end of September). For this purpose, the Federal Statistical Office calculates the deficit as defined by the Maastricht Treaty, while the Bundesbank calculates the Maastricht debt level.

Debt level (€ billion)% of GDP