Berlin’s ‘big bazooka’ proposal sends industrial stocks surging but fiscal sea change also hikes borrowing costsBusiness live – German debt ‘bazooka’ rallies stocks and euroEuropean financial markets have rallied sharply and German borrowing costs have soared after the country’s prospective leaders announced a historic deal to loosen its “debt brake” rule to boost spending on defence.The yield – in effect the interest rate – on 30-year German government bonds rose by about 25 basis points to 3.08% in its biggest daily increase since October 1998. Continue reading...
European markets surged following Germany's decision to relax its debt brake rule to allow increased defense spending. This move, agreed upon by the prospective coalition government, includes a €500bn infrastructure fund and exempts defense spending above 1% of GDP from debt limits. The announcement boosted shares in London, Paris, Milan, and Germany, while also leading to a rise in 10-year bond yields. The policy shift aims to stimulate economic growth and address concerns over security commitments.
