Who Owns US Debt

National debtGermany owes the most debt to these countries

A global debt crisis looms in the corona pandemic. Countries also borrow money abroad to mitigate the consequences. But whoever lends money becomes dependent. Liabilities are not always called in only in the form of interest. US relations with China are also so complicated because the People's Republic has long been the United States' largest creditor. In June 2019, Japan took over this title with just under $ 1.122 trillion. Almost a third of the total US external debt ($ 6.636 trillion) was accounted for by Japan and China ($ 1.112 trillion). The third-placed United Kingdom only came in at $ 341 billion.

Almost five trillion euros in foreign debt

Germany is not quite as dependent on individual creditors. But here, too, the list is manageable. In 2019, around two thirds of Germany's gross foreign debt was concentrated in ten countries. That comes from the annual statistics of the Deutsche Bundesbank. The two front runners together accounted for a quarter of all German debt securities held abroad. Their total volume in 2019 was EUR 4.974 trillion. That was 107 million euros more than in the previous year.

In relation to the gross domestic product (GDP), however, the external debt declined. It fell from 146 to 145 percent of GDP. The highest level since the turn of the millennium was reached in 2012 at 166 percent of GDP. German foreign debt has risen almost continuously since 1990. In the year of reunification, they were around two trillion euros and around 93 percent of GDP.

Germany lends money abroad

The foreign debt should not be confused with the German national debt (which amounted to 2.05 trillion euros in 2019). The foreign debt includes the financial liabilities of residents to foreigners with fixed interest and / or repayment dates. “These include, for example, bonds, loans and deposits. On the other hand, financial claims without repayment obligations, such as shares, direct investments and real estate, are left out, ”is how the Bundesbank defines the term. "The focus on foreign debts with fixed payment obligations allows a look at possible liquidity or solvency risks of a country."

German foreign debt is made up of five economic sectors:

  1. Country
  2. Bundesbank
  3. Monetary financial institutions (MFIs without the Bundesbank)
  4. Financial corporations without MFIs
  5. Non-financial corporations, households and non-profit institutions serving households

Foreign debts are valued at the market prices and exchange rates on the respective reference date. At the Bundesbank this is December 31st.

These are Germany's largest creditors abroad.

# 10 Belgium

In 2019, Belgium accounted for two percent of German foreign debt. According to the Deutsche Bundesbank, the country came in tenth place among the largest creditors abroad with 111 billion euros. In 2018, the debt in Belgium had totaled 122 billion euros.

# 9 Italy

Italy was Germany's ninth largest creditor worldwide in 2019. The foreign debt of the state, the Bundesbank, financial institutions, corporations and private households amounted to 134 billion euros (2018: 128 billion euros). That corresponded to three percent of the total foreign debt.

# 8 Japan

Japan was the US's largest creditor in 2019. In Germany, the Asian economic nation only ranks eighth. According to the Bundesbank, 173 billion euros corresponded to three percent of foreign debt. The total rose slightly from 159 billion euros in the previous year.

# 7 Ireland

Little Ireland is one of the biggest creditors in Germany. And liabilities have increased significantly. Within one year as of December 31, 2019, they increased from 183 to 212 billion euros. That corresponded to four percent of Germany's foreign debt.

# 6 Switzerland

In 2019, the state, financial institutions and households were indebted to Swiss creditors with 210 billion euros. This means that this country in other EU countries within Europe accounted for four percent of the total gross debt. The gross foreign debt remained at the level of 2018 (211 billion euros).