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BERLIN (Reuters) – Germany’s government intends to borrow much less next year as Europe’s largest economy seeks to restore its self-imposed debt brake that it suspended to deal with the coronavirus pandemic and energy crisis.
Berlin intends to issue federal securities with a total volume of 440 billion euros ($481.45 billion) in 2024, German Finance Agency issuance plans published on Tuesday showed.
This is around €60 billion less than this year, when a record high of around €500 billion was reached.
This money will be used to cover the deficit foreseen in Finance Minister Christian Lindner’s budget. In addition, around €343 billion will have to be repaid for the existing debts of the Confederation and its special funds.
After weeks of negotiations, the German government this month approved its 2024 budget, which will restore the country’s debt brake that limits borrowing to 0. 35% of GDP.
Of the 440 billion euros to be raised in 2024, the government plans to raise 247. 5 billion euros in capital market auctions of traditional federal securities and factor another 165 billion euros into the cash market, the firm said.
In addition, between €17 billion and €19 billion will be raised through federal green bonds, which will be used to finance environmental and climate-friendly spending, he said.
Major rating agencies assign a AAA rating to Germany’s creditworthiness, indicating an incredibly low level of default.
($1 = €0. 9139)
(Reporting by Rene Wagner; writing by Miranda Murray; editing by Madeline Chambers and Christina Fincher)