Economics
Germany’s Tight Purse Strings Are a Worry When Money Is Free
- Almost entire German bond market has yields at zero or lower
- Economists have urged government to boost investment spending
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Investors are so keen to find a safe home for their cash that they’re paying the German government to take it, and that makes the nation’s reluctance to borrow increasingly puzzling.
Yields are now below zero for 85% of German sovereign debt, right out to bonds that don’t mature for another 20 years. The government could finance spending for the next decade at an interest rate of less than minus 0.4%, below even the European Central Bank’s record-low policy rate.