Report
The decline in Germany’s public debt has added new countries to the “club†of supposedly risk-free government bond issuers
Investors have to invest in risk-free bonds in the euro zone . But Germany’s public debt is declining: this forces investors to add countries whose public finances are much less safe than Germany’s, such as France and, increasingly, Spain, to the “risk-free bond club†. This is helped by the structural improvement in the economies of both countries (numerous reforms in France, improvement in Spain’s cost competitiveness). Curiously, the decline in Germany’s public debt ratio is therefore driving down French and Spanish long-term interest rates.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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