Sunday, January 31, 2016

Flood of money the ECB: State saves billions – THE WORLD

Full cash fire the imagination. That proved the government fractions impressive this week. On Tuesday morning, the CSU drummed for a billion-dollar purchase premium for electric cars. On Thursday negotiated a grand coalition on a 4.3 billion euros Apartment heavy promotion program. And in between, on Wednesday called for the SPD Economics Minister times just a several hundred billion euro “modernization pact”.

In good times like these is the list long on output requirements. The federal government last year achieved a record surplus of 12.1 billion euros, the majority of federal states also was in the black. The covetous desires – and makes short-sighted. Because those responsible overlook the fact that the exceptionally good cash flow situation of the state is not even worked out, will be even permanent. She is due in large part low interest expenses. This show calculations of the Deutsche Bundesbank, the present of the “Welt am Sonntag”.

According to the federal government, provinces, municipalities and social insurance have been saying for 2008 and write € 193 billion saved on interest payments – compared with a level of interest rates as an outbreak of financial crisis in 2007 consisted. But in 2015 the state had 43 billion euros to spend less on debt.

The savings are so great because in the wake of the financial and sovereign debt crisis, the European Central Bank (ECB) has cut interest rates to near zero. In addition, German government bonds are compared to many others as a safe investment. Pay the state had 2007 or more than four percent interest, he can borrow almost at zero cost now.

Many communities depend on a drip cheap interest rates

Thanks to this interest savings worth nearly € 200 billion reorganized itself public budgets almost of its own accord. The opposition in parliament evaluates the numbers because even as evidence of the inaction of the federal finance minister “. Wolfgang Schäuble resting on the low interest rates Fed President Mario Draghi has clearly done more with its low interest rate policy for the balanced budget as Schäuble himself,” says the budgetary spokesperson for the Greens, Sven-Christian Kindler.

backing received by the Minister of Finance on the other hand by the economic experts Lars Feld. “There is a power to provide at least a balanced budget if the desires given the good budget situation threatens to grow into infinity,” says the Freiburg professor of economics. The problems he sees rather elsewhere: “Countries and communities that do not manage to consolidate itself under such favorable conditions must be wondering what they did wrong.”

An analysis of the state-owned bank KfW illustrates how municipalities depend on a drip cheap rates. 2014 have compared to the 2000 saved around 1.7 billion euros interest the cities and towns. That is roughly equivalent to their net lending. Households many eunuchs would quickly slide around, interest rates should rise.

In spite of cheap money, many local authorities have built up a large portfolio of cash advances. Such loans are actually only bridge liquidity shortages. Many municipalities use them, however, to plug long-term budget deficits. Early 2015 their volume totaled 51.5 billion euros. Should interest rates for municipalities from the current 0.3 to 1.3 percent rise, which would still be a low level, the interest costs for cash advances from 155 to 670 million euro would rise.

” From Broken savings can be no question “

The situation is similar in the countries. “Fiscal consolidation has greatly facilitated the countries due to the high tax revenues and lower interest costs,” says Niklas Potrafke by the Ifo Institute. “From Broken Save as lamenting some state politicians, can not speak.”

So had to pay 15.8 billion euros for its debt service the country last year. Compared with interest rates of 2008, the country saved according to calculations by the Kiel Institute for the World Economy (IfW) only last for this newspaper a year 12.5 billion euros in interest payments. “This is roughly equivalent to three percent of the total national issues,” says IfW researcher Jens Boysen-Hogrefe.

The politicians at federal, regional and local authorities should therefore better verplanen not too much money. The apparently free agents are still needed. For the period after the turnaround in interest rates.

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