How risky is the German government’s borrowing spree?

Germany is planning unprecedented amounts of new borrowing. In just a few years, the country has gone from penny pincher to big spender. Why is it that? And could the growing debt threaten its credit ratings?

PoliticsGermany

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PoliticsGermanyhttps://p.dw.com/p/5MHAi

Germany’s public debt is rising rapidly, with the government planning almost €1 trillion in new borrowing over the next four years.

The money will fund infrastructure upgrades, digital projects and a major military buildup. Critics, including Germany’s Federal Audit Office and taxpayer advocates, warn of a potential debt trap driven by growing interest costs and spending on consumption rather than growth-enhancing investments.

While economists and lawmakers disagree on the risks, they broadly stress that how borrowed money is spent will determine whether Germany can maintain its fiscal stability and prized AAA credit rating.

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