Germany plans record debt issuance in 2021 despite slightly lower borrowing at year-end

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BERLIN, Sept.21 (Reuters) – Germany plans to issue € 4 billion less debt in Q4 than expected as fewer companies than expected appealed to the government’s Economic Stabilization Fund (FSM) during the pandemic, the Federal Finance Agency announced on Tuesday.

Despite slightly reduced borrowing requirements at the end of the year, global debt issuance for 2021 will reach a record high of some 482 billion euros, the agency said.

Europe’s largest economy will issue a total of 104 billion euros in debt over the October-December period excluding inflation-indexed debt, the agency said.

The financing agency will raise 47 billion euros on the capital markets (1 billion less than initially planned) and 57 billion euros on the money markets (down 3 billion euros compared to the sum former).

Finance Minister Olaf Scholz has called on Parliament to suspend the debt brake in the constitution for the second year in a row, allowing new net debt of up to € 240 billion in 2021 to fund emergency measures in the part of the COVID-19 pandemic.

Added to this is the refinancing of maturing debt: in the summer quarter alone, more than 100 billion euros of old debt had to be repaid and rolled over into new debt. (Report by Michael Nienaber edited by Madeline Chambers)


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