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The Foreign Currency Debt of German Länder and Municipalities

Author

Listed:
  • Niklas Potrafke
  • Markus Reischmann
  • Julia Richenhagen
  • Marina Riem

Abstract

On 15 January 2015 Switzerland’s Central Bank decided to renounce the minimum exchange rate of the Swiss franc to the euro. Within a very brief period of time the Swiss franc appreciated by up to 20%. Switzerland’s low interest rate level previously attracted debtors to the country. Many of the beneficiaries of interest rate advantages from foreign currency loans turned into losers through the appreciation of the Swiss franc. The circle of debtors not only includes private persons, but also German Länder and municipalities. This article describes the debt structure and foreign currency debts of the Länder and municipalities.

Suggested Citation

  • Niklas Potrafke & Markus Reischmann & Julia Richenhagen & Marina Riem, 2015. "The Foreign Currency Debt of German Länder and Municipalities," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 68(04), pages 48-51, February.
    • Handle: RePEc:ces:ifosdt:v:68:y:2015:i:04:p:48-51
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    References listed on IDEAS

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    1. Ronny Freier & Verena Grass, 2013. "Kommunale Verschuldung in Deutschland: Struktur verstehen - Risiken abschätzen," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 80(16), pages 13-21.
    2. Reischmann Markus, 2014. "Staatsverschuldung in Extrahaushalten: Historischer Überblick und Implikationen für die Schuldenbremse in Deutschland," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(2), pages 171-181, June.
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    More about this item

    JEL classification:

    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

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