Germany now expects its debt level to fall back within the bounds of European Union rules as soon as 2020, faster than previously forecast, a German magazine said. EU rules saying euro zone states should keep the ratio of debt to gross domestic product at 60 percent or less have been broken for years by Germany. However, Der Spiegel said on Saturday that a new stability programme due to be agreed by the government next week foresees public debt in Europe's largest economy falling to around 59 percent of GDP in 2020.
Last year the government had said it expected the state debt pile to fall below the 60 percent threshold only by 2023. The new programme shows the ratio will likely be 68 percent this year, the magazine said. The finance ministry declined to comment on the magazine report.
Like other countries in the European Union, the German government has to provide the European Commission with a stability programme once a year. Public debt in Germany shot up due to the global financial crisis and resulting economic slump at the end of the last decade. Overall the federal government, states, communities and social funds have built up around 2.2 trillion euros in debt.
As GDP is now growing quicker than debt, the government debt ratio is falling. In 2014 Germany achieved a balanced budget for the first time since 1969 and the government plans to get by without net new debt until 2020 despite increasing spending, thanks largely to rising tax revenues.