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Record Debt after Coronavirus – What about the Burden on German Länder Budgets?

Author

Listed:
  • Klaus Gründler
  • Armin Hackenberger
  • Lukas Kähn
  • Remo Nitschke
  • Niklas Potrafke
  • Joachim Ragnitz

Abstract

The coronavirus pandemic is forcing Germany’s federal states, or Länder, to respond with fiscal policy on a historic scale. A total of more than EUR 105 billion in new debt has been approved, mostly through the adoption of – in some cases several – supplementary budgets. Multiple German Länder have also set up special funds, which may lead to a lack of transparency. If the possible new debt is standardized to one year, the new credit authorizations in some states correspond to 30 percent of the 2019 budget volume. Favorable conditions have driven the consolidation progress that has opened up this room for maneuver. It is not certain whether the federal states will continue to have such conditions in the future.

Suggested Citation

  • Klaus Gründler & Armin Hackenberger & Lukas Kähn & Remo Nitschke & Niklas Potrafke & Joachim Ragnitz, 2020. "Record Debt after Coronavirus – What about the Burden on German Länder Budgets?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(11), pages 40-49, November.
    • Handle: RePEc:ces:ifosdt:v:73:y:2020:i:11:p:40-49
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    References listed on IDEAS

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    6. Klaus Gründler & Niklas Potrafke & Fabian Ruthardt, 2020. "How Do Economists Assess the Economic Policy Responses to the Coronavirus Crisis? – Part 2," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(06), pages 52-55, June.
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    Cited by:

    1. Remo Nitschke, 2021. "The Burden of Corona Debt - What Burdens Will Federal State Budgets Face in the Coming Years?," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 28(01), pages 03-09, February.

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    More about this item

    Keywords

    Länderhaushalt; Länderfinanzen; Länderverschuldung; Epidemie;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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