The German Federal Ministry of Finance (BMF) has expressed concerns that Germany could lose its top credit rating with major rating agencies. This warning was reported by Spiegel, referencing documents from the Ministry.
According to the officials, including Finance Minister Lars Klingbeil (SPD), the long-term sustainability of public finances is increasingly under pressure due to growing debt levels, the strain of demographic changes, and weak growth prospects.
Even the mere expectation of a downgrade could lead to increased yields in the market, resulting in higher refinancing costs. The official paper further states that a downgrade itself would likely solidify this difficult situation for many years to come.
A particularly significant burden is the rapidly escalating acquisition of federal debt. The Ministry projects that the required interest expenditures, starting in 2028, will reach levels the federal government has not previously faced. The document forecasts that in 2028, interest costs within the federal budget will amount to €55.2 billion, climbing further to €80.7 billion by 2030.
