German Press: ‘Bell’ for Greek and Italian bonds

Developments in the international capital markets, as well as plans for the reform of the Stability Pact, are attracting the interest of the German-language press.

The financial inspection predicts turmoil in the bond markets Handelsblatt, as central banks launch interest rate hikes and “international investors are once again starting to look more closely at debt rates”. Among other things, we read: “In Germany, the yield on the five-year and ten-year bonds no longer has a negative sign. At 0.2%, the ten-year bond reaches the highest levels since May 2019, the five-year bond yields a positive interest rate for the first time since In the US, ten-year government bond yields are approaching the 2% mark. For years, bond markets have not shown as much mobility in such a short period of time. This shows that normalcy is returning to normal, as more than a decade of negative interest rates has passed. Yields in countries such as Italy, Greece and Spain are growing at a much faster rate than equivalent to secure debtors, such as Germany “.

Handelsblatt is talking about an imminent “domino” in the markets, with the US Federal Reserve throwing the first stone and investors betting on the level of interest rate hikes. According to the German newspaper, “the memories of the debt crisis in the eurozone ten years ago are still fresh. After the suspension of payments in Greece, investors demanded such high yields on the bonds of Southern Europeans that they almost collapsed. the speech of the then head of the ECB Mario Draghi, with his announcement that he will do “whatever it takes to save the euro” and with the subsequent first bond purchases by the ECB. Since then the ECB has become the largest buyer of bonds in the eurozone “The bond rescue program to save the euro followed an emergency quantitative easing program (PEPP) to offset the harmful economic consequences of the pandemic.”

The German financial review notes that bond yields are rising, “especially in Greece, once again, as well as in Italy, the country with the highest public debt in the eurozone. The yield on the 10-year Greek bond reaches 2.4%, Clemens Fust, head of the IfO Economics Institute in Munich, said: “The rise in spreads in recent days shows that investors are not willing to hold bonds from eurozone countries with high debt, unless the ECB offers some kind of guarantee that it will support ‘”.

A hawk with …friendly moods

While this is happening in the markets, the discussion about the revision of the stability pact in the EU starts soon and everyone is waiting for the official position of the German Minister of Finance Christian Lindner, who had a reputation as a “priest” in the budget, but so far shows rather friendly moods. In an article entitled “A friendly hawk” the weekly newspaper Die Zeit notes that the liberal German Minister of Finance has received positive comments from his counterparts in the Eurogroup, including the Minister of Finance of Greece, Christos Staikoura. Specifically, Mr. Staikouras states: “My colleague Christian Lindner has a deep knowledge and understanding of economic policy. I am particularly optimistic that he states that he is willing to work constructively with all his colleagues. I am optimistic that we can all open issues “.

However, the columnist argues that Christian Lindner will eventually reject both the demands within Germany for more state resources and the communitization of fiscal policy in Europe. “His people are already preparing the justification for a careful policy change, based on economic theory,” the columnist said. “According to this perception, the ‘macroeconomic environment’ has changed. Until now, the state could have been charged without pay, as economic growth was so weak and interest rates so low. Now the economy is growing again, interest rates are rising. Lending ‘There is no debt’, as Christian Lindner puts it, adding that politics should ‘prioritize’ and ‘absorb shocks’. Lindner himself. ”

Electric cars for “greens“ ministers

The financial website Businessinsider.de informs us about the official cars chosen by the ministers of the new German government. The main question is, of course, whether the ministers of the “Greens” have chosen an electric car. And indeed it is, the columnist informs us: Minister of Agriculture Cem Edzdemir has chosen an Audi e-tron, Minister of Family Affairs Anne Spiegel prefers a BMW i4. The most luxurious choice was made by Foreign Minister Analena Berbock, who chose a Mercedes EQS, which, however, has not yet been delivered. At the moment, the head of the German diplomacy is moving with a hybrid Audi A8 L. The exception is the “green” Minister of Economy Robert Habeck, who does not want his own official car and moves with any vehicle available from the experts of the German Forensic Service ( BKA). Only the “fleet” of the BKA has only armored cars with a conventional engine and not electric vehicles.

Giannis Papadimitriou

SOURCE: Deutsche Welle