European Liabilities Absent from German Debt Statistics // ZEW Study on the Transparency of EU Debt Burden

ZEW Study on the Transparency of EU Debt Burden

For Germany, the sum of indirect repayment obligations amounts to 262 billion euros when fully paid out according to plan.

Germany's financial liabilities are larger than indicated in the official statistics on public debt. The reason for this is the EU's debt burden, which does not appear in the national data. This European debt has led to hidden liabilities, which will soon account for nearly ten per cent of the German government debt. Costing 750 billion euros for taxpayers, the coronavirus economic recovery plan "Next Generation EU" (NGEU) in particular has brought about a financial burden for Germany which is not included in the German debt statistics. These are the findings of a study conducted by ZEW Mannheim with the support of the Strube Stiftung.

"EU debt is politically attractive. Economically, however, it creates the wrong incentives, especially for highly indebted Member States. There is an urgent need for EU debt to be counted towards the national debt of the Member States. Doing so would remedy the current lack of fiscal transparency," explains Friedrich Heinemann, head of ZEW's "Corporate Taxation and Public Finance" Research Unit.