Germany forgave massive loans for several nations.
Numerous nations possess humongous debts towards the Federal Republic of Germany, notes from the Federal Ministry of Finance demonstrate. In many cases, these debts have been forgiven in the past 20 years, with some of them tracing back to the 1980s.
Since 2000, Germany has dismissed a grand sum of 15.8 billion euros in debts for 52 countries, as per a reply from the Federal Ministry of Finance in response to a query from AfD MP Stephan Brandner. Notably, Iraq was the recipient of the highest amount of debt forgiveness, estimated at 4.7 billion euros. Nigeria and Cameroon were the subsequent recipients with 2.4 billion and 1.4 billion euros, respectively.
The complete details, indicated in the response, show that each of the 52 countries involved negotiated an arrangement with Germany to have their debts disregarded. Brandner also asked about the present-day debt status involving the Federal Republic. It consisted of 12.2 billion euros, owed by 70 countries and Palestinian territories as of December 31, 2023. The dominating debts are currently owed by Egypt (1.5 billion), India (1.1 billion), and Zimbabwe (889 million).
Brandner: "Doubtful if we can afford this"
"Debt forgiveness is geared towards attaining or preserving economic stability and reclaiming debt repayment capability of debtor countries." The Federal Ministry added, "This also assists highly indebted impoverished nations in their battle against poverty."
The canceled funds, as per the Ministry, incorporate open funds from Germany's financial cooperation with the countries and trade debts from trading arrangements of German exporters and banks, mostly from the 1980s. Germany provided compensation to these companies employing Hermes guarantees if payments for deliveries were not received or credits weren't repaid.
Brandner maintains that such debt forgiveness appears suspicious, questioning if Germany can actually afford it. "Our run-down infrastructure requires every cent (...) more so considering there exist nations that have unsuccessfully been written off more than once and continue to accumulate ever-growing debts, expecting yet more debt write-offs."
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The Federal Government has played a significant role in reducing public debt for several countries through debt forgiveness. As Brandner mused, this action raises questions about the affordability of continuing such practices, given the pressing needs for infrastructure development within Germany.
