Oops! Germany finds 55 billion euros after fixing accounting error

Daylife/Reuters Pictures used by permission

Germany has found itself 55 billion euros richer after discovering an accounting error at Hypo Real Estate (HRE), the troubled bank it nationalised in 2009.

The country now expects its ratio of debt to GDP to be 81.1% for 2011, 2.6 percentage points lower than previously forecast, the finance ministry said.

The miscalculation was at the so-called bad bank of HRE, FMS Wertmanagement. The discovery was made earlier this month but only announced on Friday…

Think this had at least a little bit to do with Merkel’s support for the Greece bailout?

HRE faced a severe liquidity shortage in the wake of US banking giant Lehman Brothers’ bankruptcy in 2008.

The German government provided the bank with capital injections of 10bn euros and liquidity guarantees amounting to 145 billion euros before nationalising it.