Germany’s finance agency has just announced some of the details of the country’s debt issuance plans for next year. And most notably, the standout is the main figure in itself as Europe’s largest economy is poised to issue about €512 billion in securities in 2026. That will mark a post-war record issuance, one that even beats out the pandemic aid back in 2021. For some context, Germany issued roughly €483 billion in securities during that year to counter the impact from the Covid pandemic.
As added context, Germany raised a total of around €438 billion in 2024 and adjusted borrowing for 2025 is estimated at €425 billion.
The high issuance size here will be one to be wary about as Germany continues to aggressively pivot on its fiscal policy stance. They’re no longer keeping the purse strings tight and that is surely going to lead to a steady climb in debt-to-GDP ratio over the next few years. And unlike in 2021, Germany must now pay significantly more to service this debt.
Given the circumstances, it is likely that we will see Germany exceed the EU’s 3% deficit-to-GDP limit next year. It is one that is a very rare occurrence for Europe’s largest economy. So, expect that to make the headlines in 2026 as Germany plans to borrow its way out of stagflation.
The breakdown of the €512 billion issuance sees €318 billion raised in the capital market while €176 billion is raised in the money market. Both of those will be raised through auctions, with a 20-year federal bond set to be issued for the first time “in light of demand”. Germany then plans to issue roughly €16-19 billion in green federal securities next year.
Again, the backdrop here is very much different to what we saw previously in 2021. Back then, the issuance was primarily driven by pandemic aid and subsidies to businesses to counter the impact of the Covid pandemic. This time around, it is more of a structural shift to long-term investment as Germany focuses more on infrastructure, defence, and climate.
