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Banknotes on a table (symbol image): increased income thanks to negative interest
Photo: Monika Skolimowska / dpa
Entering new debts paid off once more for the German state in the first quarter - thanks to negative interest rates. The issue of bonds and other capital market instruments to finance the budget, including special assets, generated around two billion euros in income. This emerges from a letter from Finance Secretary Sarah Ryglewski to a request from the Bundestag member Fabio De Masi from the Left Party.
"The federal government is making a lot of money this year by getting into debt," said De Masi and added, referring to Federal Finance Minister Olaf Scholz (SPD): "The ECB is doing its job and keeping interest rates low so that Olaf Scholz does not have any financing problems." Anyone who wants to go back to the debt brake under these circumstances and put the ax to public investments or the welfare state is "an economic ghost driver".
Germany could grow out of debt in the long term without any problems.
The billions are due to the negative interest rates on the capital market.
Investors give the federal government more money when they borrow than they get back in the end.
In financial jargon one speaks of an agio profit.
The finance agency responsible for federal debt management came up with an issue volume of 59.7 billion euros in the first quarter. The average return on issue was minus 0.54 percent. Nevertheless, the auctions were oversubscribed. The so-called bid-to-cover ratio, i.e. the ratio between the demand and the paper actually available, was 1.54. "German government bonds are hot commodities on the capital market," said De Masi. »The federal government could have sold even more bonds in the auctions, because on average there were significantly more bids from the banks than bonds sold. Even though the returns are negative. "
In total, the finance agency wants to collect more than 471 billion euros from investors this year.
The main reason for this is the federal government's record new indebtedness due to the enormous costs of the corona pandemic.
In addition, old debts must be repaid.
Why German government bonds are a popular investment
The federal government is so popular with investors that its creditworthiness is given the top rating of "AAA" by all major rating agencies.
This means that the repayment of the debt is very safe.
In addition, there is a huge market for trading these papers, which is why federal securities for pension funds, asset managers and other investors enjoy almost cash status.
Investors are therefore prepared to pay on it instead of collecting interest.
In addition, the European Central Bank (ECB) acts on a large scale as a buyer of securities.
This increases demand, which in turn depresses returns.
As a result, interest expenses fell to 6.4 billion euros last year, despite the record high levels of new borrowing, the lowest level in decades.
Also because of the slight rise in interest rates, the federal government expects a trend reversal and is therefore increasing the item for expected interest expenditure for this year by 4.5 billion to 10.3 billion euros in its supplementary budget.
mic / Reuters