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 3 February 2026.

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 underpinned by Germany’s highly integrated institutional framework for the Länder, which combines a robust revenue equalisation system, the constitutional federal solidarity principle, and a demonstrated role of the federal government in absorbing major shocks, notably during the Covid-19 pandemic and the Russia–Ukraine crisis. Together, these elements materially enhance the Länder’s resilience to economic and financial disruptions and support the close credit alignment between the Länder and the German federal government (AAA/Stable).

Scope expects the March 2025 debt brake amendments, allowing for an aggregate structural deficit of up to 0.35% of GDP, to potentially increase Länder debt over time. Nevertheless, under Scope’s baseline, sustained fiscal discipline and rising revenues supported by a strengthening economic environment should allow debt burdens to stabilise over the medium term. Further, the EUR 100bn infrastructure programme is fully federally financed and does not affect Länder balance sheets. Berlin has also agreed a Climate Pact for 2025–30 involving significant investment by state-owned companies, supported in part by shareholder funding from the Land, which may increase contingent liabilities while supporting the energy transition and infrastructure resilience.

Berlin’s AAA rating further reflects the following 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) a resilient economic structure and favourable demographics.

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

The Stable Outlook represents Scope’s view that risks to the ratings over the next 12 to 18 months are balanced.

Downside scenarios for the ratings and Outlooks are if (individually or collectively):

1. Downgrade of Germany’s sovereign rating/Outlook;
    
2. Changes to the institutional framework were to result in notably weaker support; and/or
    
3. The individual credit profile weakened significantly and structurally.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Sub-Sovereign Rating Methodology, 12 September 2025) 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, Executive Director

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