Finance: Germany’s enormous hidden debt
23 September 2011
“The Truth," leads Handelsblatt, giving short shrift to the alleged parsimony of the German state – and the astronomical numbers support it. Officially, German debt in 2011 stands at 2,000 billion euros. But that's only half the truth, because the major portion of expenditure for pensioners, the sick and dependent persons is not included in the calculation. According to new figures, the real debt is 5,000 billion euros. If these figures stand, Germany is in debt to the tune of 185 percent of its gross domestic product and not 83 percent, as officially declared. By comparison, Greek debt should be 186 percent of GDP in 2012, and Italy's debt is currently at 120 percent. The critical threshold beyond which debt crushes growth is 90 percent. Since coming to power in 2005, Angela Merkel, "has created as much new debt as all the chancellors in the previous four decades together," writes the chief economist of the business daily. "These are 7,000 billion euros on a bad cheque that we have signed and our children and grandchildren will have to pay."