By Christian Kraemer and Holger Hansen
BERLIN -The energy crisis will push Germany to take on well over twice as much new debt next year as previously expected, officials said on Friday, saddling it with billions of euros in unplanned interest payments.
The budget foresees 45.61 billion euros ($46.62 billion) in new debt in 2023, compared with 17.2 billion euros in the government’s summer draft.
The new figure is still far less than the 139.9 billion euros of new debt budgeted for this year, and the officials said it would allow Germany to comply with its constitutionally enshrined debt brake – which limits the fiscal deficit to 0.35% of gross domestic product – for the first time since 2019.
The brake has been suspended during the COVID-19 pandemic.
But Finance Minister Christian Lindner said that calculation excluded funding for the armed forces and the relief package for the energy crisis, which were “crisis-related expenses that we separate from our regular federal budget.”
The Bundestag is set to approve the 2023 budget, which foresees a total of 476.3 billion euros, on Nov. 25.
The lower parliamentary house has already approved new debt of up to 300 billion euros for a special fund for the army and an economic stabilisation programme to finance, among other things, a planned gas and electricity price brake, neither of which are part of the regular budget.
The rising cost of borrowing and high inflation mean the government faces some 10 billion euros more in interest payments than previously expected in 2023, a parliamentary budget committee document seen by Reuters showed.
The interest burden would rise to some 40 billion euros from 29.6 billion estimated by the government. This would be 10 times the expenditure of 3.9 billion euros in 2021. In the past, such interest estimates have often been on the high side.
There is a risk that interest rates could rise further. “That’s why we’ve taken precautions so that we don’t end up being caught off guard by the capital markets,” Lindner added.
($1 = 0.9783 euros)