Germany has finally chosen to lead by example. For now only at her house, though. From 2013 the Teutonic debt agency will issue, in fact, bonds shared by the Federation and the sixteen Länder. Until today, the issues of the Länder were autonomous and did not contemplate any type of intervention by the Federation.
As already announced last December, however, to help some Regions in particular financial difficulty and with a poor rating, the German executive has given the go-ahead to issue a new type of bond, the launch of which is expected shortly. in the first half of July. Thanks to the triple A of the Federation, i Countries in crisis they will be able to catch their breath, enjoying more favorable financing conditions, while Berlin will accept to see its conditions slightly worsened. According to some calculations by the Moody's agency, for example, the Country of North Rhine-Westphalia could save up to 380 million euros. Only Bavaria and Baden-Württemberg, traditionally wealthy regions, have chosen to stay out of it, continuing to refinance themselves independently, in the belief that they can obtain even more favorable rates.
For the first auction, the federal debt agency hopes to collect about 3 billion euros, a part of which should be able to be allocated to the flood emergency that has affected central-southern Germany. Investors are expected from various European and Asian financial centres. The decision to pool regional debts with the federal one, even if only partially, responds to the clear idea that, after the introduction of balanced budgets in the Constitutions of the Länder and the strengthening of controls on local and regional bodies, it makes sense to offer a counterpart to them, even more so if the balanced budget for the Länder will have to be respected starting from 2020 and the road to zero net debt is still far from complete in many regions.
At the European level, the news should leave us hoping for the intentions of the Christian-liberal government led by Mrs Merkel, who, if re-elected, should be able to leave room for a progressive communion of sovereign debts. Provided you believe that the Member States have given sufficient financial and expenditure guarantees.
