Today: High debt, little growth – Germany could lose top rating
In the government, concern is growing that Germany's AAA rating could be lost. And: Amazon, Google and Co. are issuing more and more bonds. This also has consequences for investors.
Germany currently has a AAA credit rating, one of only eleven countries worldwide to hold this top rating. However, there is growing concern among the federal government and economists that this rating could be downgraded. The consequences would include higher interest rates, reduced fiscal space in the national budget, and negative feedback effects on other Eurozone countries.
The main reasons for these concerns are Germany's unusually high debt levels coupled with weak economic growth. Surprisingly, the substantial special reserve held by the federal government is supposed to boost growth in the country. As Martin Greive, chief political reporter at Handelsblatt, explains, "The creditworthiness of Germany is now largely dependent on the success of this debt package." If Germany fails to reverse its debt trend, it risks following in France's footsteps.
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
