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Germany forgives almost 16 billion euros of debt to other countries

Germany forgives almost 16 billion euros of debt to other countries
Germany forgives almost 16 billion euros of debt to other countries

Dozens of countries owe billions of euros to the Federal Republic of Germany. In many cases, outstanding debts have been forgiven over the past two decades.

Since 2000, Germany has forgiven debts totaling 15.8 billion euros for 52 countries. This is according to a response from the Federal Ministry of Finance to a query from AfD MP Stephan Brandner, which was made available to the German Press Agency. The most debts, amounting to 4.7 billion euros, were forgiven for Iraq, followed by Nigeria with 2.4 billion euros and Cameroon with 1.4 billion euros. According to the information, a government agreement to regulate debt forgiveness was concluded with each of the 52 countries.

Brandner also asked about the current level of debt to the Federal Republic. As of December 31, 2023, this amounted to a total of 12.2 billion euros for a total of 70 states and the Palestinian territories. Egypt currently has the largest liabilities to Germany (1.5 billion), ahead of India (1.1) and Zimbabwe (889 million).

Ministry: Germany’s debt relief should stabilize economy and fight poverty

“The debt relief serves to achieve or maintain macroeconomic stability and to regain the debt sustainability of the debtor countries,” the ministry said in its response. In addition, it is intended to support poverty reduction, particularly in heavily indebted poor countries.

According to the Finance Ministry, the debts that were forgiven were outstanding funds from financial cooperation with the states and trade claims from delivery and credit agreements of German exporters and banks, mainly from the 1980s. Germany compensated these companies on the basis of so-called Hermes cover if deliveries were not paid or loans were not repaid.

Brandner said it was more than questionable whether Germany could actually afford these debt reliefs. “Our dilapidated infrastructure needs every cent (…) especially since there are countries that have already been relieved of their debts several times without success and the constant hope of debt relief drastically increases the tendency to take on more and more debt.”

Source: Stern

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