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Negative yields throw a harsh light on Germany’s debt fixation

It is time for German policymakers to realise that if investors are prepared to pay to lend money to the country, they should take it and build

Fiscal security: Gold bars in the safe of Pro Aurum Gold trading house in Munich, Germany
Fiscal security: Gold bars in the safe of Pro Aurum Gold trading house in Munich, Germany Photo: Michael Gottschalk / Getty Images

Germany’s obsession with fiscal balance never made much economic sense.

But with interest rates on 10-year government bonds now hovering around 0%, it may soon turn into self-harm. Yields even turned negative last week on new dovish signals sent by Mario Draghi, the president of the European Central Bank. Let us translate: investors pay the German government money for the privilege of lending it their funds.

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