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German 2017 government borrowing to be at lowest in at least 15 years - sources
December 16, 2016 / 12:10 PM / a year ago

German 2017 government borrowing to be at lowest in at least 15 years - sources

BERLIN (Reuters) - The German government will borrow less money on capital markets in 2017 than at any point in at least 15 years, two people familiar with the matter told Reuters on Friday.

Government debt auctions should bring in up to 180 billion euros (151.16 billion pound) next year, according to current plans, the sources said. That compares with 202.5 billion euros this year.

The federal government will not need to borrow as much money next year because it does not have to pay back as much existing debt to creditors.

“That means refinancing needs will be significantly lower,” one of the sources said.

As the government does not use current revenues to pay off old debt, it needs to borrow money to amortise that debt and an additional financial buffer is also always built in to calculations, which is why the government needs new money even though it plans to do without any new debt in 2017.

The Finance Agency, which is responsible for managing the federal government’s debt auctions, is due to publish its auction plans for 2017 next week.

Germany, Europe’s largest economy, wants to stick to a balanced budget over the next four years.

Reporting by Rene Wagner and Matthias Sobolewski; Writing by Michelle Martin; Editing by Paul Carrel

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