Germany cuts debt load as bad bank burden shrinks

FRANKFURT — Germany has cut its debt load thanks to a strong economy and the diminishing burden of bailing out banks during the financial crisis.

The Bundesbank national central bank said Thursday that debt fell to 64 per cent of annual economic output by the end of 2017, from 68 per cent in 2016. That’s getting closer to the 60 per cent ceiling established under the criteria associated with the shared euro currency.

Most of the decline came not from government thrift, but from working off shaky financial assets dumped on the taxpayers through “bad banks” as the government bailed out financial institutions that suffered crippling losses.

Germany has also been running slight budget surpluses, despite complaints from unions and some economists that it ought to spend more on infrastructure and other investment.

Meanwhile, unemployment in Germany fell below 2.5 million in March amid a seasonable upswing.

The Federal Labor Agency said the unadjusted rate fell to 5.5 per cent in March from 5.7 per cent the month before, with the number of unemployed dropping by 88,000 to 2.46 million.

Compared with the same month a year ago, the number of people unemployed in Europe’s largest economy fell by 204,000.

Adjusted for seasonal factors, the jobless rate fell one percentage point to 5.3 per cent month-on-month.

The labour agency said there were 778,000 vacancies in March, an increase of 86,000 compared with the same month in 2017.