Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations that may act as a lender of last resort.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic or financial-market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit rating’s performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope announces the result of each monitoring review on its website and/or on its subscription platform ScopeOne.

Scope completed the monitoring review for the Land of Berlin (long-term local- and foreign-currency issuer and senior unsecured debt ratings: AAA/Stable; short-term local- and foreign-currency issuer rating: S-1+/Stable) on 8 April 2025.

This monitoring note does not constitute a credit-rating action, nor does it indicate the likelihood that Scope will conduct a credit-rating action in the short term. Information about the latest credit-rating action connected with this monitoring note along with the associated ratings history can be found on scoperatings.com.

Key rating factors

The AAA/Stable rating is supported by the highly integrated institutional framework for the German Länder, which includes a robust revenue equalisation system, the federal solidarity principle, and the federal government’s primary role in absorbing shocks—demonstrated during the Covid-19 pandemic and the Ukraine-Russia crisis. These elements enhance the Länder's capacity to manage economic and financial disruptions. Recent amendments to Germany’s debt brake framework allow all Länder, collectively, to run a structural deficit of up to 0.35% of national GDP, and to draw on EUR 100bn in federally borrowed infrastructure funds (part of a broader EUR 500bn initiative). Scope expects that the additional borrowing capacity may lead to higher debt levels across the Länder. However, higher revenues under the baseline scenario, supported by a strengthening economy and the Länder's continued fiscal commitment, should broadly stabilise the debt burden.

Berlin’s AAA rating is further supported by several individual credit strengths: i) conservative budgetary management with a solid track record of fiscal consolidation, ii) excellent capital market access and a favourable debt profile, iii) prudent liquidity management; and iv) robust socio-economic fundamentals.

Credit challenges relate to i) elevated debt levels, ii) increasing budgetary pressures combined with moderate budgetary flexibility, and iii) sizeable, though largely low-risk, contingent liabilities.

The Stable Outlook represents Scope’s view that risks to the ratings over the next 12 to 18 months are balanced. The ratings could be downgraded if: i) the German sovereign rating was downgraded; ii) changes to the institutional framework were to result in notably weaker support; and/or iii) the individual credit profile deteriorated significantly and structurally.

For the latest Rating Report, click here.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Sub-Sovereigns Rating Methodology, 11 October 2024) is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Jakob Suwalski, Senior Director

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