Record-Low ECB Rates Are a €1 Trillion Government Windfall

The bank's efforts to spark inflation are keeping bond yields low and saving governments a fortune

Euro-area governments have saved almost 1 trillion euros ($1.16 trillion) in interest payments since 2008 as record-low European Central Bank rates depress bond yields at a the time when state treasurers are also reducing debt. That’s according to calculations by Germany’s Bundesbank, which is urging finance ministers in the 19-nation region to make provisions for when interest rates start to rise. Italy, the world’s third-most indebted country, has benefited most, with savings exceeding 10 percent of gross domestic product.


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