Germany plans record debt issuance in 2023 as energy crisis bites

BERLIN  – Germany plans record debt issuance of more than 500 billion euros ($533 billion) next year to fund costs associated with the energy crisis and the fallout from the COVID-19 pandemic, German Finance Agency issuance plans published on Wednesday showed.

The government intends to issue federal securities with a total volume of about 539 billion euros in 2023, the agency said. That compares with 449 billion euros this year and 483 billion in 2020, the previous record.

Europe’s biggest economy is trying to cope with surging gas and electricity costs caused largely by a collapse in Russian gas supplies to Europe, which Moscow has blamed on Western sanctions following its invasion of Ukraine in February.

In response to the energy crisis, the German government has set out a 200 billion euro “defensive shield” to protect companies and households from the impact of soaring energy prices.

Government spending is to exceed revenues in the coming year, when the federal government will also have to repay securities worth more than 325 billion euros to investors.

Of the more than 500 billion euros to be raised in 2023, the government plans to raise 274 billion euros in capital market auctions of conventional federal securities and to issue a further 242 billion euros on the money market, the agency said.

In addition, 15 billion to 17 billion euros will be raised via green federal securities and 6 billion to 8 billion euros via inflation-linked federal securities, it said.

($1 = 0.9382 euros)