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Economy

German economic boom fails to reverse debt

Germany's sovereign debt remained above 2 trillion euros ($2.58 trillion) in 2011, despite additional revenues on the back of robust economic growth. And the national debt clock is bound to keep ticking away.

At the end of 2011, Germany had accumulated exactly 2,025,400,000,000 euros in sovereign debt, which was 0.7 percent more than in the previous year, according to data published by the German Federal Statistics Office, Destatis, Thursday.

In broken down figures, this amounted to 24,771 euros of debt for every German, Destatis said.

The debt of the national government was by far the highest, standing at 1.28 trillion euros, even though Berlin was able to reduce its debt by 0.6 percent last year.

However, the country's regional governments, as well as local municipalities were adding 2.5 percent and 4.9 percent respectively to the national debt mountain in 2011, Destatis said.

In 2011, Germany was unable to keep its sovereign debt from rising despite robust economic growth of 3.0 percent, which washed billions of euros in additional revenue into state coffers.

Under current budget plans, the government aims to reduce fresh borrowing from 32.1 billion euros this year to 18.8 billion euros in 2013. In this effort, Berlin may continue to enjoy extremely low borrowing costs - currently standing at around 2 percent as Germany is seen by investors as safe haven in the eurozone crisis.

However, the total national debt of Germany is expected to rise above 2.2 trillion euros in 2012, according to calculations published by the Kiel Global Economics' Institute Thursday.

The figure means that the ratio of debt to gross domestic product (GDP) in Germany will rise to 83 percent - well above the EU's official limit of 60 percent laid down in the Lisbon Treaty.

uhe/mz (Reuters, dpa)