Economy & Politics

Germany has the most debts in these countries

A global debt crisis threatens the corona pandemic. States also borrow money abroad to mitigate the consequences. But those who borrow money make themselves dependent. Liabilities are not always only claimed in the form of interest. The relationship between the United States and China is so complicated because the People’s Republic has long been the largest creditor of the United States. In June 2019, Japan took over this title with just under $ 1.122 trillion. Japan and China ($ 1.112 trillion) accounted for almost a third of the total US external debt ($ 6.636 trillion). The third-placed United Kingdom only got $ 341 billion.

Almost five trillion euros in foreign debt

Germany is not quite as dependent on individual creditors. But the list is also manageable here. In 2019, around two thirds of Germany’s gross external debt was concentrated in ten countries. This is clear from the annual statistics of the Deutsche Bundesbank. The top two came together for a quarter of all German debt securities held abroad. Their total volume was € 4.974 trillion in 2019. That was 107 million euros more than in the previous year.

In relation to gross domestic product (GDP), however, external debt declined. It fell from 146 to 145 percent of GDP. The peak since the turn of the millennium had been reached in 2012 at 166 percent of GDP. German foreign debt has increased almost continuously since 1990. In the year of reunification, they were around two trillion euros and about 93 percent of GDP.

Germany borrows money abroad

Foreign debt is not to be confused with German government debt (which amounted to 2.05 trillion euros in 2019). Foreign debt comprises the financial liabilities of residents towards foreigners with fixed interest and / or repayment dates. “These include, for example, bonds, loans and deposits. Financial claims without repayment obligation, such as shares, direct investments and real estate, are left out, however, ”the Bundesbank defines the term. “The focus on foreign debt with fixed payment obligations allows a look at possible liquidity or solvency risks in a country.”

German economic debt is made up of five economic sectors:

  1. Country
  2. Bundesbank
  3. Monetary financial institutions (MFIs without the Bundesbank)
  4. Financial corporations without MFIs
  5. Non-financial corporations, households and non-profit organizations

Foreign debt is valued at the market prices and exchange rates on the respective reporting date. This is December 31 at the Bundesbank.

These are Germany’s largest creditors abroad.

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