(Repeats with no changes)
* ECB bond buying, low rates help German states overturn deficits
* German state interest payments drop 40 pct in eight years - S&P
* First surplus in over 30 years for NRW in 2016
* Long-dated issuance ensures low refinancing costs for years
* Graphic: ECB purchases push down yields http://reut.rs/2tktbUt
By Abhinav Ramnarayan
LONDON, July 6 (Reuters) - Many Germans see the European Central Bank's bond-buying scheme and interest rates cuts as subsidising indebted southern euro zone members at the expense of northern savers, but it has also transformed the finances of Germany's regions.
The central bank started cutting interest rates in 2008 to help the economy after the global financial crisis and gathered pace as a series of debt crises hit the euro zone in 2011 and 2012.
The monetary easing stepped up a gear when the ECB embarked on a trillion euro bond-buying scheme in March 2015 which pushed borrowing costs even lower.
This punished German savers by driving interest rates to record lows but helped countries such as Spain, Italy and Portugal manage a sharp increase in their debt loads.
It was also good news for the 16 regions and city-states including Lower Saxony, North Rhine Westphalia and Berlin, collectively known as the "Laender".
The regions have had their debt servicing costs cut by an average 40 percent in eight years, according to ratings agency S&P Global, and have been able to issue long-dated bonds and fix costs at extremely low levels.
"Most German states are running a surplus now and one of the reasons for this improvement is certainly the lower interest rate environment besides robust tax revenue increases," said Thomas Fischinger, a director at S&P Global.
The ECB's deposit rate -- a closely watched interest rate set by the central bank -- has fallen from 3.25 percent in 2008 to minus 0.40 percent. It has been negative since 2014.
Then in 2015 it started to buy billions of euros of bonds every month. This brought down yields and interest payments on government borrowing dropped sharply.
Short-dated bond yields even went negative for countries with higher credit ratings such as Germany, the Netherlands and Austria, so investors were effectively paying to lend to them.
This pushed German regional bond yields lower as investors bought German state debt as an alternative to Bunds.
BUDGETARY SURPRISE
While German national debt is among the lowest in the euro zone, regional debt is among the highest.
The sixteen have average debts of around 160 percent of revenues. This compares with 5-100 percent for Austrian states and around 20-50 percent for Russian regions, while for Swiss cantons 200 percent would be at the very high end, according to S&P Global's Fischinger.