{"id":191806,"date":"2025-06-17T13:47:21","date_gmt":"2025-06-17T13:47:21","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/191806\/"},"modified":"2025-06-17T13:47:21","modified_gmt":"2025-06-17T13:47:21","slug":"era-of-bund-scarcity-is-over-says-german-debt-chief","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/191806\/","title":{"rendered":"Era of Bund scarcity is over, says German debt chief"},"content":{"rendered":"

Stay informed with free updates<\/p>\n

Simply sign up to the Eurozone economy myFT Digest — delivered directly to your inbox.<\/p>\n

The era of Bund scarcity is \u201cdefinitely over\u201d, said a senior German official, as the Eurozone\u2019s safest borrower increases sales of its benchmark debt to fund a defence and infrastructure spending spree.<\/p>\n

Tammo Diemer, an executive board member at Germany<\/a>\u2019s finance agency who oversees its sovereign debt issuance, pointed to the increasing availability of German bonds in the secondary market following the end of quantitative easing.\u00a0<\/p>\n

\u201cScarcity of Bunds is definitely over,\u201d he told delegates at the Financial Times\u2019 Global Borrowers & Bond Investors Forum in London. \u201cThere are only a number of securities where there is still shortness in the market.\u201d<\/p>\n

The constitutional limit on Germany\u2019s debt level has contributed to the country\u2019s status as the Eurozone<\/a>\u2019s safest borrower and historically created a shortage of its debt that suppressed its borrowing costs. Bunds provide a benchmark against which other countries\u2019 creditworthiness is viewed.<\/p>\n

The end to the European Central Bank\u2019s bond-buying programmes, which had bought up huge amounts of Bunds and other government debt during previous crises, was a major driver of the greater availability, he added.<\/p>\n

Germany\u2019s borrowing costs jumped<\/a> in March in their biggest one-day move since 1997 after it announced a \u20ac1tn spending package that exempted defence spending from its constitutional debt brake. <\/p>\n

\"Line<\/p>\n

Underlining the normalisation in the market, Diemer pointed to German bond yields moving above interest rate swaps of the same duration, which happened<\/a> for the first time last year as expectations mounted over debt brake reform. <\/p>\n

The 10-year Bund yield, which near traded near zero for years, rose above 2.9 per cent in March, but has since fallen to around 2.5 per cent. Yields move inversely to prices.<\/p>\n

Speakers at the event also pointed to growing interest among global investors in AAA-rated euro debt as an alternative to dollar assets, amid broad doubts over the greenback\u2019s haven status. The proportion of global fund managers who are underweight the dollar is at its highest level for 20 years, according to a Bank of America survey on Tuesday.<\/p>\n

Siegfried Ruhl, from the Directorate-General for Budget of the European Commission, which manages common EU issuance, said turbulence in dollar markets had attracted investors to common EU debt.<\/p>\n

\u201cWe are seeing increased interest\u2009.\u2009.\u2009.\u2009We see new names in our [debt syndications] from countries or regions which are typically very dollar-based,\u201d he said, adding that they were also meeting requests from global investors. \u201cAt the moment it is an opportunity for Europe to strengthen its position [in the] global capital markets.\u201d\u00a0<\/p>\n

Ruhl said the introduction of EU debt into sovereign bond indices, which has not yet happened, would be crucial to the development of the asset class.<\/p>\n

Separately, officials responsible for issuing sovereign debt for other Eurozone borrowers, such as Ireland and Portugal, said there had been interest from foreign issuers looking to diversify away from dollar assets.<\/p>\n

\u201cIt has definitely helped [the] spread compression\u201d between Eurozone governments and Germany\u2019s benchmark debt, said Dave McEvoy at Ireland\u2019s National Treasury Management Agency.<\/p>\n

Additional reporting by Emily Herbert<\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the Eurozone economy myFT Digest — delivered directly to…\n","protected":false},"author":2,"featured_media":191807,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,16,15],"class_list":{"0":"post-191806","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114699019505830582","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/191806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=191806"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/191806\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/191807"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=191806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=191806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=191806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}