Here’re CDS swaps and spreads vis a vis Germany over the past year:

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The credit ratings have been stable for years…until today. Here’s S&P’s:

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Here’s the fiscal situation, as summarized by the budget balance as share of GDP.

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The six percent of GDP deficit is smaller than in 2020, and is comparable to that in the US. However, the US issues the world’s global currency, so is endowed with exorbitant privilege. Moreover, the budget is the flow, and doesn’t show the outlook for debt, given the pressures coming from pension spending over time. So while debt to GDP has fallen since 2020, it’s going to reverse course in the future (this is where the importance of reviving trend growth comes into play).

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