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Western States Must Refinance Huge Debt This Year

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This year the major economies need to raise about 7.1 trillion US dollars to refinance national debt. Germany alone has to take out around 203 billion euros of new debt – a considerable challenge in view of the fragile global economy.

Western States Must Refinance Huge Debt This Year

Photo: DPA

Originally appeared at DWN, translated by Karin exclusively for SouthFront

The governments of the major economies have again to refinance debt of more than 7 billion US Dollar in 2016, as Bloomberg reported. The value of treasury bills, long-term and short-term deadline bonds of the G7 countries, which are due in 2016, amounts to a total of 7.1 trillion dollars. Of the refinancing are especially the BRIC countries of Brazil, China, India and Russia are concerned.

Already in 2012 the leading economic nations had to spend 7.6 trillion US dollars to repay their maturing government bonds. 2015 on the other hand was the refinancing still 7 trillion US dollars. According to Bloomberg the repurchase of each mature, old debt in Japan, Germany, Italy and Canada will tend to continue to decline in volume. By contrast, China, the US and the UK are faced with increased refinancing.

Germany plans in 2016 to increase the issuing of new government bonds and treasury bills to 203 billion euros, according to Bloomberg. In comparison to 175 billion euros in 2015. The increase of the new debt should be partly used to finance the cost of the influx of migrants.

In the USA in 2016 bonds of about 3.5 trillion US dollars will be due. This is 14 percent more than last year. As the highest however, will be the rise in bond releases in China. The volume will increases there by 41 percent to 254 billion dollars.

In contrast, Russia and Brazil are looking at the largest proportional decline in the debt-repayments: They will decrease in 2016 by 38 and 26 percent. If you add the interest to it the G7 and BRIC countries still need to refinance 7.8 billion euros – only a small difference compared 2015.

Nevertheless, analysts see since the data collection in 2012 a gradual decline of maturing bonds. Along with the rise in interest rates, the bond market is expected to stabilize and thus increase again returns on equity.

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