German debt ratio up in 2020 to 70.0%
In the year that the coronavirus pandemic began, general government debt in Germany was up by €275 billion to €2.332 trillion. The debt ratio, meaning the ratio of debt to gross domestic product, rose by 10.3 percentage points to 70.0% in 2020, which is the sharpest increase in the debt ratio within the space of a year since German reunification.
Just one year previously, Germany’s debt ratio, at 59.7%, had dropped below the Maastricht Treaty’s reference value of 60% for the first time since 2002. By way of comparison, during the economic and financial crisis, the debt ratio increased by 16.8 percentage points in 2009 and 2010 combined and reached an all-time high of 82.5% – due in part to the assumption of extensive risk assets from the banking sector.
Just over half of the rise in government debt last year can be traced back to the deficits of central, state and local government and social security funds, totalling €140 billion, while general government used the other half to accumulate financial assets – liquidity reserves and assistance loans, in particular.
The EU Member States report data on the general government fiscal balance and on debt to the European Commission each year at the end of March and end of September – known as the SGP compliance report. To this end, the Federal Statistical Office calculates the balance (deficit/surplus) and the Bundesbank the debt level.