Germany faces massive long-term debt from EU recovery fund

Germany faces significant long-term financial obligations stemming from the NextGenerationEU recovery fund. Estimates suggest the country will be responsible for between 145 billion and 154 billion euros in principal and interest payments through 2058. Germany’s share is calculated at approximately 22.6 percent of the total EU debt burden, which is estimated to range between 649 billion and 681 billion euros.

Repayments are scheduled to begin in 2028, with a particularly heavy burden expected between 2028 and 2034. During this six-year period, Germany’s costs for interest and principal are projected to reach between 32 billion and 38 billion euros. While the current period (2021–2027) only involves interest payments, those costs have already nearly doubled from an initial 15 billion euros to 28 billion euros.

In response to these rising costs, German Chancellor Friedrich Merz has rejected the European Commission’s proposal for the 2028–2034 Multiannual Financial Framework, labeling the plans ‘unpayable’. Germany has formed an alliance with Denmark, Finland, the Netherlands, Austria, and Sweden to demand significant budget cuts, targeting a reduction of approximately 400 billion euros in the EU budget draft.