BERLIN (Reuters) - Germany’s Finance Ministry on Wednesday dismissed a study saying Berlin saved billions of euros through low borrowing costs due to Europe’s debt crisis and said the current low interest rate environment “not ideal”.
The Halle-based Leibniz Institute for Economic Research said in a report on Monday that Germany had saved 100 billion euros ($109 billion) since 2010 because its borrowing costs fell during the European debt crisis.
The institute assumed a fictitious “normal” situation to make its calculations, which the Finance Ministry disputed.
“The evaluation is speculative and not comprehensible to us,” a ministry spokesman said, before criticising the general low interest rate environment.
German 2-year bond yields touched a record low on Wednesday.
Germany has seen its sovereign borrowing costs fall sharply since the onset of the euro zone debt crisis as investors fled the periphery of the currency area and sought sanctuary in the top-rated German paper.
“The government finds this situation, as it is now, is not an ideal situation,” the ministry spokesman said. “Quite the opposite: We are working for this low interest rate level to be overcome with our crisis(-fighting) policy.”
The spokesman said low rates had many negative effects, for example on pension schemes.
He made no mention of the official interest rates set by the European Central Bank, which are at record lows. The German government generally avoids commenting on the policy of the ECB, respecting its independence.
($1 = 0.8949 euros)
Reporting by Gernot Heller; Writing by Paul Carrel; Editing by Tom Heneghan