Germany Predicts Doom and Gloom as Eurozone Worries Mount
SputnikNews.com
12.02.2016
The German treasury has predicted “substantial sustainability risks” to the country amid reports that the Eurozone is set for further bailouts because of fears over another sovereign debt crash.
Despite Germany’s Federal Finance Minister Wolfgang Schauble running a 2015 surplus of US$13.5 billion, experts in his department are predicting “substantial sustainability risks” to Germany’s long-term debt-to-GDP ratio because of an aging population.
A report to be put before Schäuble next week, states that — unless Germany starts making huge cuts to its state budget now — it will be unable to sustain the debt burden caused by an aging population and a low birthrate.
Unless the finance minister takes drastic action, the German debt-to-GDP ratio will reach 220 percent by 2060 — massively above the 60 percent limit set out under the Maastricht agreement of 1992. Germany — being a central pillar of the Eurozone — is under huge pressure to keep within the fiscal rules of the single currency agreement.
The report — leaked to the newspaper Welt am Sonntag — suggests that state spending will have to be capped each year over the next five years by around 5.8 percent. At its most pessimistic, Germany would need to start cutting US$26 billion annually.
This figure is seen as difficult to achieve given the current strain on the federal budget owing to the refugee crisis, which has seen 1.1 million migrants arrive in Germany.
Italian and Portuguese Pain
The Rest…HERE
