/ world today news/ The coronavirus pandemic provoked a “debt explosion” in the West, writes Deutsche Wirtschafts Nachrichten. The public sector suffered the most, but businesses and private households also suffered losses. In Germany and Europe, in terms of debt, “all the dams have burst.” The German budget deficit reached a record €218 billion, and for the first time in the history of the EU, Brussels decided to issue its own loans.
Since the beginning of 2020, the debts of countries, enterprises and households have grown significantly, writes Deutsche Wirtschafts Nachrichten. According to data from the Institute of International Finance, total global debt in the first quarter increased to a record $258 trillion. In the second quarter, the situation worsened due to the coronavirus pandemic. To prevent national economies from collapsing due to measures to combat COVID-19, countries borrowed another $12.5 trillion.
The public sector suffered the most from the “debt boom”. Corporate debt has risen sharply only in the US. Not so much in Europe. And the least damage was done to private households, because they were supported with money from the authorities, but at the same time they were affected by unemployment, the publication explains.
In Germany and Europe in terms of debt “all the dams have burst”, continues Deutsche Wirtschafts Nachrichten. This year, the German budget deficit reached a record €218 billion. Berlin approved a package of billions of dollars for the unemployed and businesses. In addition, Germany will invest money in the development of the so-called technologies of the future.
At the European level, the consequences are even more large-scale, the publication continues. For the first time in the history of the EU, the European Commission will launch its own loans, the responsibility for which will be borne by all member states of the Union. We are talking about the controversial ones “eurobonds“which will be introduced in Brussels “through the back door”. As a result, the European Commission will take on debts of €360 billion, which will have to be repaid by 2058.
Translation: M.Zhelyazkova
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