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After the 600 million euros in 2029, the federal government would earn more with its debts every year. In 2039 – the calculations will last until this year – it would be 3.1 billion euros alone. In total, over the ten years it would even be just over 21 billion euros in additional income.
However, the Ministry of Finance points out that these calculations are fraught with great uncertainty. “The results are heavily dependent on the assumptions made and are therefore very uncertain, especially with long time horizons,” the paper says.
A slight rise in interest rates leads to higher spending
This is also made clear by a second scenario that the officials of Federal Finance Minister Olaf Scholz (SPD) calculated. An annual increase in interest rates of 0.1 percentage points is assumed.
Even this small plus in returns would shatter the dream of making money with federal debt. Instead of income of 600 million euros, in this scenario there would be a debt service of 7.5 billion euros in 2029.
Interest expenditure would rise to 13.6 billion euros a year by 2039. However, even that would still be relatively low in historical comparison: In 2008 the federal government had to spend around 40 billion euros on interest.
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The Green budget expert Sven-Christian Kindler therefore considers higher debts to be justifiable, for example to finance higher investments. “Even with pessimistic assumptions about interest rate developments, borrowing from the federal government is not a problem in the long term,” said Kindler, referring to the calculations.
Decisive for debt sustainability is less the share of debt in gross domestic product, but the amount of interest payments. And they stayed permanently low. “As the calculations of the Ministry of Finance show, the federal government will only have to pay very little interest expenditure over the next few decades, even if interest rates rise,” says Kindler.
Critics of higher debts point out, however, that interest rates could rise more sharply again as a result of higher inflation, which could also make borrowing more expensive again in the medium term – even more than the Federal Ministry of Finance assumes in its calculations.
More: How the Corona debt could go away on its own.
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