German Chancellor Angela Merkel’s government has saved 80 billion euros ($106 billion) since the start of the financial crisis as a result of declining bond yields, the Kiel-based Institute for the World Economy said.

Interest payments last year were about 10 billion euros lower than they would have been under a “benchmark scenario” that uses average yields in the decade before the crisis, the institute said in a report. This year’s savings for the federal government will amount to about 13 billion euros, it said. The period covers 2009 to 2013.

“The decline of bond yields is mainly driven by the low business cycle dynamics in the euro area and the interest rate policy of the European Central Bank,” IfW economist Jens Boysen-Hogrefe said in his report, e-mailed by the institute today. Still, a “safe haven effect” will contribute about 3 billion euros to this year’s savings, he said.

Almost half of Germans want the country’s highest court to stop the ECB’s bond-buying program, a Forsa poll published in today’s edition of Handelsblatt newspaper showed, in a sign that voters are wearying of rescue efforts for debt-stricken countries even as Germany benefits.

“The gains from these low interest rates should not be taken as a signal to boost public debt in Germany,” said Boysen-Hogrefe. “These gains are one-time effects rather than a structural improvement of the budget.”

Germany’s 10-year bund yield was up 1 basis point at 1.61 percent at 10:30 a.m. in Berlin, the highest since Feb. 25.

German Finance Minister Wolfgang Schaeuble plans to balance the federal budget next year in “structural” terms, adjusted for economic swings and one-time factors. The budget plan for 2015 foresees no net new borrowing.
French Divergence

France, while also benefiting from declining bond yields over time, doesn’t enjoy safe-haven status in the way Germany does, Boysen-Hogrefe said. The gap between the two countries widened during 2011, when rumors about a break–up of the euro area became more intense, he said.

“From a European perspective, it might be argued that these remarkable one-time effects are benefits that the German government has experienced due to the debt crisis and that it would be reasonable to spend this amount supporting those countries in the euro area that are most affected by the debt crisis,” he said. “However, one might also argue that only those benefits should be counted that are due to the ‘safe haven’ effect, since countries like France are benefiting from effects that are due to the ECB’s policy as well.”

The benefit for the federal government, responsible for about half of Germany’s public debt, may grow to more than 100 billion euros “in coming years,” Boysen-Hogrefe said. His figures don’t include savings enjoyed by Germany’s 16 states, and municipalities.