Posting errors by the balance sheet experts at the bad bank of the nationalized Hypo Real Estate (HRE) have brought Federal Finance Minister Wolfgang Schauble an unexpected drop in the German national debt ratio. His ministry confirmed corresponding information from "stern.de". This means that the German debt ratio for 20.2 percent, one point lower than it was reported to the EU Commission in September. And for 2011 a general government debt level of 81.1 percent is expected – 2.6 points less than expected in the last Maastricht communication to Brussels.
Balance sheet corrected retrospectively
FMS Wertmanagement, as the Bad Bank is called, had already corrected its balance sheet retrospectively for 2010 and reported 24.5 billion less debt than previously mentioned. In the balance sheet for 2011 it should be another 31 billion. The liabilities of FMS flow directly into the German national debt – in other words: the taxpayers are liable. As "stern.de" reports, the Parliamentary State Secretary Hartmut Koschyk (CSU) had already mentioned the old and the new figures in the answer to a question from the Bundestag member Klaus Ernst (Left Party) in September. However, he did not mention the context.
Ministry of Finance calls correction "pleasant"
"We have simply forgotten to balance," said a spokesman for the Bad Bank. A spokesman for the finance ministry confirmed that a subsequent reduction in the FMS balance sheet total by 24.5 billion euros for 2010 "also had an impact on the general government debt level for the past year". For the current year, it is to be expected that the reduction of the commitments taken over by HRE at the time will continue to progress. "It is also to be welcomed that the balance sheet total, which includes derivatives and hedging transactions, has been reduced by almost ten percent compared to the 2010 annual financial statements of over EUR 30 billion". That was gratifying, it said in the Ministry of Finance. The ministry was informed last week about the balance sheet correction by FMS Wertmanagement.
The ministry rated the reason for the correction as "plausible". "Apparently there are incorrect double bookings," it said there. The exact causes still have to be clarified. Regardless of this, "the Federal Government generally welcomes any reduction in the Maastricht debt level".
A new minus is already looming
However, even with this lower quota, Germany is still significantly above the Maastricht limit value – which is 60 percent of gross domestic product for total debt. And the reduction in debt in the course of the recalculation could quickly put itself into perspective again: The intended 50 percent haircut for Greece is on the balance sheet not yet fully taken into account – and the FMS recently held Greek papers worth eight to nine billion euros.