German Treasury fears loss of top credit rating

The Federal Ministry of Finance (BMF) fears that Germany could lose the top rating for its creditworthiness with the rating agencies. This is reported by "Spiegel" citing a note from the ministry.

Civil servants from Finance Minister Lars Klingbeil (SPD) warn that the long-term sustainability of public finances is coming under increasing pressure due to rising debt, demographic burdens, and weak growth prospects. The paper further states that even the expectation of a downgrade would lead to higher yields and thus higher refinancing costs in the market, and a downgrade itself would likely fix this situation for many years.

In particular, the consequences of the federal government's rapidly increasing debt are considered burdensome. With the budgeted interest expenditures starting in 2028, amounts will be reached that the federal government had not yet been able to muster. For 2028, the paper estimates interest expenditures in the federal budget at 55.2 billion euros, rising to 80.7 billion euros by 2030.