Real long-term interest rates and the use of savings in the euro zone

We see two possibilities for the use of savings in the euro zone: Either a significant share of the euro zone’s savings will continue to be lent or invested in the rest of the world, outside the euro zone. When euro-zone countries make the necessary ecological transition investments, they will be faced with a shortage of available savings. As a result, real long-term interest rates will rise, well above their current level; Or euro-zone countries will be able to use the savings currently lent to the rest of the world to invest in the euro zone. The amount of savings available will then be sufficient to cover additional investment needs, and real long-term interest rates will not rise above the current level, which is roughly equal to the euro zone’s potential growth. The trend in real long-term interest rates in the euro zone will therefore depend crucially on whether euro-zone savings are used domestically or abroad.