Government borrowing costs in several advanced economies hit their highest level since the 2008 financial crisis, or even earlier, on Monday as investors feared the Middle East crisis would keep inflation persistently high.

Concerns over rising prices and government spending pushed up the cost of debt issued by Paris, Berlin, Washington DC, Tokyo and London as investors fretted that rising prices would push up interest rates.

The yield, or interest rate, on 30-year French bonds rose to its highest level since September 2008 at 4.8558%, up one basis point (0.01 percentage point), LSEG data showed.

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[–] [S] 1 point 2 months ago (2 children)

The difference between the two rates does kind of illustrate why there are German objections to Eurobonds.

How so, could you elaborate how you see euro bonds working?
Imo, the inverse is equally true. Ergo, an avarage lower interest rate could benefit more countries and people But it's only true when there is a solid EU fiscal/monetary policy in place. If not, then your rationale holds, I'd think.

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  • [–] 1 point 2 months ago (1 child)

    How so

    Because any borrowing done will be at a single rate that reflects overall European creditworthiness and will compete with German federal bonds for German creditworthiness.

    If I'm an EU member and my borrowing rate is significantly lower than that of other members, I'd rather borrow any money myself. I'd rather borrow as a group with other parties that have comparable creditworthiness.

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