Abstract
2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Germany
Fund Relations
(As of April 30, 2017; unless specified otherwise)
Mission: May 4–16, 2017 in Berlin, Bonn, Frankfurt, and Nuremberg. The concluding statement of the mission is available at
Staff team: Ms. Detragiache (head), Messrs. Natal and Vandenbussche, and Mses. Mineshima and Pereira (all EUR).
Country interlocutors: Parliamentary State Secretary Meister, Bundesbank President Weidmann, officials from the Federal Chancellor’s office, the Finance, Economic Affairs, Labor, and Environment Ministries, the Bundesbank, the Federal Office for Migration and Refugees. Mr. Meyer (OED), Mr. Thomsen (EUR), and Ms. Kozack (STI) participated in the discussions. Additional meetings took place with representatives from the social partners, the banking and insurance sectors, think tanks, and academics.
Fund relations: The previous Article IV consultation discussions took place during April–May 2016 and the staff report was discussed by the Executive Board on July 24, 2016. The Executive Board’s assessment and staff report are available at http://www.imf.org/external/pubs/cat/longres.aspx?sk=44029.0
Membership Status: Joined August 14, 1952; Article VIII.
| General Resources Account: | SDR Million | Percent of Quota | |
|---|---|---|---|
| Quota | 26,634.40 | 100.00 | |
| Fund holdings of currency | 23,799.60 | 89.36 | |
| Reserve position in Fund | 2,83493 | 10.64 | |
| Lending to the Fund | |||
| New Arrangements to Borrow | 1,991.83 | ||
| General Resources Account: | SDR Million | Percent of Quota | |
|---|---|---|---|
| Quota | 26,634.40 | 100.00 | |
| Fund holdings of currency | 23,799.60 | 89.36 | |
| Reserve position in Fund | 2,83493 | 10.64 | |
| Lending to the Fund | |||
| New Arrangements to Borrow | 1,991.83 | ||
| SDR Department: | SDR Million | Percent of Allocation |
|---|---|---|
| Net cumulative allocation | 12,059.17 | 100.00 |
| Holdings | 11,716.25 | 97.16 |
| SDR Department: | SDR Million | Percent of Allocation |
|---|---|---|
| Net cumulative allocation | 12,059.17 | 100.00 |
| Holdings | 11,716.25 | 97.16 |
Outstanding Purchases and Loans: None
Financial Arrangements: None
Projected Payments to Fund (SDR Million; based on existing use of resources and present holdings of SDRs, as of April 30, 2017):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Principal | |||||
| Charges/Interest | 1.13 | 1.97 | 1.97 | 1.97 | 1.97 |
| Total | 1.13 | 1.97 | 1.97 | 1.97 | 1.97 |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Principal | |||||
| Charges/Interest | 1.13 | 1.97 | 1.97 | 1.97 | 1.97 |
| Total | 1.13 | 1.97 | 1.97 | 1.97 | 1.97 |
Exchange Rate Arrangement
Germany’s currency is the euro, which floats freely and independently against other currencies.
Germany is an Article VIII member and maintains an exchange system free of restrictions on payments and transfers for current international transactions. It maintains measures adopted for security reasons, which have been notified to the Fund for approval in accordance with the procedures of Decision 144 and does so solely for the preservation of national or international security.
Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT)
Germany was last assessed against the previous AML/CFT standard in 2009. Some shortcomings were identified inter alia with respect to the money laundering (ML) and terrorist financing (TF) offenses, and AML/CFT preventive measures (including the reporting of suspicious transaction requirements, and customer due diligence, CDD, requirements). In recent years, Germany has introduced significant reforms to enhance its AML/CFT regime. It notably criminalized self-laundering and immobilized bearer shares, enhanced domestic cooperation, and improved the supervisory framework for designated non-financial business and professions (DNFBPs) and the risk analysis model applied by BaFin for AML/CFT supervision. Onsite visits to financial institutions and DNFBPs have increased. Germany made progress in addressing the 2016 FSAP’s main recommendations on AML/CFT. BaFin notably increased by 30 the staff devoted to AML/CFT supervision, and established new units specifically dedicated to the supervision of major banks with cross-border activities. Within the EU, the German authorities actively support enhanced cooperation between AML/CFT supervisors. BaFin has started to establish its own audit teams (along external audit teams), increased the number of its onsite inspections of banks, and is planning on-site inspections to be carried out by BaFin-only teams in the medium term. It is also adjusting its AML/CFT supervisory framework in line with the European Supervisory Authorities’ joint November 2016 guidelines on risk-based supervision. Furthermore, Germany is working on the implementation of the Fourth EU AML Directive requirement to establish a register containing information on beneficial ownership information of corporate and other legal entities, and of express trusts and legal arrangements having a structure or functions similar to trusts. A draft law implementing this requirement is scheduled to enter into force in June 2017, and to allow for the register to be accessible by competent authorities in December 2017.
The next assessment of Germany’s AML/CFT framework is tentatively scheduled to take place in 2021.
Statistical Issues
(As of June 13, 2017)
| I. Assessment of Data Adequacy for Surveillance | |
| General: The economic database is generally comprehensive and of high quality, and data provision is adequate for surveillance. | |
| National Accounts: Germany adopted the European System of Accounts 2010 (ESA2010) in September 2014. The 2006 ROSC Data Module mission found that the macroeconomic statistics generally follow internationally accepted standards and guidelines on concepts and definitions, scope, classification and sectorization, and basis for recording. However, the sources for estimating value added for a few categories of service industries could be improved. A direct source for quarterly changes in inventories, which is an important indicator of changes in GDP over the business cycle, is lacking. Extrapolations of changes in inventories are based on the difference between the monthly production index and turnover index in manufacturing. | |
| Government Finance Statistics: Comprehensive data reporting systems support the accuracy and reliability of the government finance statistics. However, these data are based on cash accounting systems, although documentation exists to explain the differences between the general government data in the ESA2010 (noncash) classification and the general cash data on an administrative basis; Germany publishes—through Eurostat—general government revenue, expenditure, and balances on a noncash/ accrual basis on a quarterly basis (ESA2010) and these data are presented in a GFSM 2001 format in International Financial Statistics, albeit with delay. Germany submits annual data for publication in the Government Financial Statistics Yearbook, in GFSM 2001 format. Monthly data are only disseminated on a cash-basis and are reported to STA. | |
| Monetary and Financial Statistics: The ECB reporting framework is used for monetary statistics and data are reported to the IMF through a “gateway” arrangement with the ECB. The arrangement provides an efficient transmission of monetary statistics to the IMF and for publication in the IFS. Monetary statistics for Germany published in the IFS cover data on central bank and other depository corporations (ODCs) using Euro Area wide residency criterion. Data based on national residency criterion is also published as memorandum items. | |
| Financial Sector Surveillance: Germany participates in the IMF’s Coordinated Direct Investment Survey (CDIS), Coordinated Portfolio Investment Survey (CPIS) and financial soundness indicators (FSIs) databases. The German authorities compiled a comprehensive set of FSI data and metadata. Of the 40 FSIs, Germany reports all except net foreign exchange exposure to equity (I31). Even though Germany reports all of the 12 core FSIs, six FSIs are reported on an annual basis only: (i) NPL Net of Provisions to Capital, (ii) NPL to Total Gross Loans, (iii) Return on Assets, (iv) Return on Equity, (v) Interest Margin to Gross Income, and (vi) Non-Interest Expense to Gross Income. Plans are already underway to change the legal basis for the periodicity of deposit taking institutions’ reporting requirements. In addition, the quality of data on bank exposures submitted to the BIS needs to be improved, including provision of the data on ultimate risk basis for advanced countries. | |
| External Sector Statistics: The Bundesbank compiles the balance of payments in close cooperation with the Federal Statistical Office. Balance of payments, International Investment Position statistics, and related cross-border statistics are compiled according to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6), and the legal requirements of the ECB and Eurostat. | |
| II. Data Standards and Quality | |
| Adherent to the Special Data Dissemination Standards Plus (SDDS Plus) since February 2015. Implementing G-20 DGI recommendations: Currently disseminates a residential property price index and a commercial property price index. | Data ROSC from 2006 is available. |
| I. Assessment of Data Adequacy for Surveillance | |
| General: The economic database is generally comprehensive and of high quality, and data provision is adequate for surveillance. | |
| National Accounts: Germany adopted the European System of Accounts 2010 (ESA2010) in September 2014. The 2006 ROSC Data Module mission found that the macroeconomic statistics generally follow internationally accepted standards and guidelines on concepts and definitions, scope, classification and sectorization, and basis for recording. However, the sources for estimating value added for a few categories of service industries could be improved. A direct source for quarterly changes in inventories, which is an important indicator of changes in GDP over the business cycle, is lacking. Extrapolations of changes in inventories are based on the difference between the monthly production index and turnover index in manufacturing. | |
| Government Finance Statistics: Comprehensive data reporting systems support the accuracy and reliability of the government finance statistics. However, these data are based on cash accounting systems, although documentation exists to explain the differences between the general government data in the ESA2010 (noncash) classification and the general cash data on an administrative basis; Germany publishes—through Eurostat—general government revenue, expenditure, and balances on a noncash/ accrual basis on a quarterly basis (ESA2010) and these data are presented in a GFSM 2001 format in International Financial Statistics, albeit with delay. Germany submits annual data for publication in the Government Financial Statistics Yearbook, in GFSM 2001 format. Monthly data are only disseminated on a cash-basis and are reported to STA. | |
| Monetary and Financial Statistics: The ECB reporting framework is used for monetary statistics and data are reported to the IMF through a “gateway” arrangement with the ECB. The arrangement provides an efficient transmission of monetary statistics to the IMF and for publication in the IFS. Monetary statistics for Germany published in the IFS cover data on central bank and other depository corporations (ODCs) using Euro Area wide residency criterion. Data based on national residency criterion is also published as memorandum items. | |
| Financial Sector Surveillance: Germany participates in the IMF’s Coordinated Direct Investment Survey (CDIS), Coordinated Portfolio Investment Survey (CPIS) and financial soundness indicators (FSIs) databases. The German authorities compiled a comprehensive set of FSI data and metadata. Of the 40 FSIs, Germany reports all except net foreign exchange exposure to equity (I31). Even though Germany reports all of the 12 core FSIs, six FSIs are reported on an annual basis only: (i) NPL Net of Provisions to Capital, (ii) NPL to Total Gross Loans, (iii) Return on Assets, (iv) Return on Equity, (v) Interest Margin to Gross Income, and (vi) Non-Interest Expense to Gross Income. Plans are already underway to change the legal basis for the periodicity of deposit taking institutions’ reporting requirements. In addition, the quality of data on bank exposures submitted to the BIS needs to be improved, including provision of the data on ultimate risk basis for advanced countries. | |
| External Sector Statistics: The Bundesbank compiles the balance of payments in close cooperation with the Federal Statistical Office. Balance of payments, International Investment Position statistics, and related cross-border statistics are compiled according to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6), and the legal requirements of the ECB and Eurostat. | |
| II. Data Standards and Quality | |
| Adherent to the Special Data Dissemination Standards Plus (SDDS Plus) since February 2015. Implementing G-20 DGI recommendations: Currently disseminates a residential property price index and a commercial property price index. | Data ROSC from 2006 is available. |
Germany: Table of Common Indicators Required for Surveillance
(As of May 22, 2017)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Pertains to contribution to EMU aggregate.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition
Includes external gross financial asset and liability positions vis-a-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA)
Reflects the assessment provided in the data ROSC (published on January 18, 2006, and based on the findings of the mission that took place during July 5–20, 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning methodological soundness, namely, (i) concepts and definitions, (ii) scope, (iii) classification/sectorization, and (iv) basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 9, except referring to international standards concerning accuracy and reliability, namely, (i) source data, (ii) assessment of source data, (iii) statistical techniques, (iv) assessment and validation of intermediate data and statistical outputs, and (v) revision studies.
Germany: Table of Common Indicators Required for Surveillance
(As of May 22, 2017)
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | Memo Items | ||
|---|---|---|---|---|---|---|---|
| Data Quality–Methodological soundness 9 | Data Quality– Accuracy and reliability 10 | ||||||
| Exchange Rates | May 22, 2017 | May 22, 2017 | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | March 17 | April 17 | M | M | M | ||
| Reserve/Base Money2 | March 17 | April 17 | M | M | M | ||
| Broad Money2 | March 17 | April 17 | M | M | M | ||
| Central Bank Balance Sheet | April 17 | May 17 | M | M | M | ||
| Consolidated Balance Sheet of the Banking System | March 17 | April 17 | M | M | M | ||
| Interest Rates3 | April 17 | May 17 | M | M | M | ||
| Consumer Price Index | April 17 | May 17 | M | M | M | ||
| Revenue, Expenditure, Balance and Composition of Financing4— General Government5 | Q4:16 | February 17 | Q | Q | Q | LO, LO, LO, O | O, O, O, O, O |
| Stocks of General Government and Government-Guaranteed Debt6 | December 16 | February 17 | A | A | A | ||
| External Current Account Balance | March 17 | May 17 | M | M | M | O, O, LO, O | O, O, O, O, O |
| Exports and Imports of Goods and Services | March 17 | May 17 | M | M | M | ||
| GDP/GNP | Q1:17 | May 17 | Q | Q | Q | O, O, O, O | LO, O, O, O, O |
| Gross External Debt | Q4:16 | March 17 | Q | Q | Q | ||
| International Investment Position7 | Q4:16 | March 17 | Q | Q | Q | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Pertains to contribution to EMU aggregate.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition
Includes external gross financial asset and liability positions vis-a-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA)
Reflects the assessment provided in the data ROSC (published on January 18, 2006, and based on the findings of the mission that took place during July 5–20, 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning methodological soundness, namely, (i) concepts and definitions, (ii) scope, (iii) classification/sectorization, and (iv) basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 9, except referring to international standards concerning accuracy and reliability, namely, (i) source data, (ii) assessment of source data, (iii) statistical techniques, (iv) assessment and validation of intermediate data and statistical outputs, and (v) revision studies.
Germany: Table of Common Indicators Required for Surveillance
(As of May 22, 2017)
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | Memo Items | ||
|---|---|---|---|---|---|---|---|
| Data Quality–Methodological soundness 9 | Data Quality– Accuracy and reliability 10 | ||||||
| Exchange Rates | May 22, 2017 | May 22, 2017 | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | March 17 | April 17 | M | M | M | ||
| Reserve/Base Money2 | March 17 | April 17 | M | M | M | ||
| Broad Money2 | March 17 | April 17 | M | M | M | ||
| Central Bank Balance Sheet | April 17 | May 17 | M | M | M | ||
| Consolidated Balance Sheet of the Banking System | March 17 | April 17 | M | M | M | ||
| Interest Rates3 | April 17 | May 17 | M | M | M | ||
| Consumer Price Index | April 17 | May 17 | M | M | M | ||
| Revenue, Expenditure, Balance and Composition of Financing4— General Government5 | Q4:16 | February 17 | Q | Q | Q | LO, LO, LO, O | O, O, O, O, O |
| Stocks of General Government and Government-Guaranteed Debt6 | December 16 | February 17 | A | A | A | ||
| External Current Account Balance | March 17 | May 17 | M | M | M | O, O, LO, O | O, O, O, O, O |
| Exports and Imports of Goods and Services | March 17 | May 17 | M | M | M | ||
| GDP/GNP | Q1:17 | May 17 | Q | Q | Q | O, O, O, O | LO, O, O, O, O |
| Gross External Debt | Q4:16 | March 17 | Q | Q | Q | ||
| International Investment Position7 | Q4:16 | March 17 | Q | Q | Q | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Pertains to contribution to EMU aggregate.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition
Includes external gross financial asset and liability positions vis-a-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA)
Reflects the assessment provided in the data ROSC (published on January 18, 2006, and based on the findings of the mission that took place during July 5–20, 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning methodological soundness, namely, (i) concepts and definitions, (ii) scope, (iii) classification/sectorization, and (iv) basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 9, except referring to international standards concerning accuracy and reliability, namely, (i) source data, (ii) assessment of source data, (iii) statistical techniques, (iv) assessment and validation of intermediate data and statistical outputs, and (v) revision studies.