21 March | Euro

Increase in Germany’s spending raises economic risks across Europe

Increase in Germany’s spending raises economic risks across Europe

Bloomberg reports that Germany's increased government spending is driving up borrowing costs across Europe. The situation is especially perilous for the countries with high national debt, such as Italy and Spain, where bond rates have already climbed more than 30 basis points. 

According to the news agency, investors are concerned that highly indebted nations may struggle to pay interest on the debt. This may result in another European debt crisis similar to the one that occurred more than a decade ago. 

Despite the risks, some experts are optimistic. For example, Lynda Schweitzer of Loomis, Sayles & Company, who holds Spanish, Italian and French bonds, considers a softer fiscal policy to be a potential driver for economic growth. She believes funding infrastructure and other key sectors will help boost GDP growth and thus partially offset the increasing debt load. 

Brent sell
Period: 11.07.2025 Expectation: 400 pips
Brent falls ahead of OPEC+ decisions
04 July 2025 29
Period: 18.07.2025 Expectation: 900 pips
AUDCAD is likely to keep pulling back from its monthly high
04 July 2025 29
Period: 10.07.2025 Expectation: 1200 pips
Selling USDJPY during rebound with 142.430 target
03 July 2025 55
Period: 11.07.2025 Expectation: 220 pips
Heatwaves across Europe and US support gas price recovery from recent lows
03 July 2025 149
Period: 08.07.2025 Expectation: 1500 pips
EURUSD rally faces potential correction toward 1.165
02 July 2025 79
Period: 09.07.2025 Expectation: 1400 pips
USDCAD declines amid US dollar weakness and improving Canadian trade prospects
02 July 2025 55
Go to forecasts