Deutsche Bank urges swift reforms as Germany receives €1 trillion in low-cost funding
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Germany has just landed what the chairman of Deutsche Bank describes as a €1 trillion windfall—and it didn’t cost the country a penny in extra interest.
Thanks to favourable bond market reactions, Berlin can now borrow huge sums virtually for free, following the approval of a major new spending package.
Speaking at a finance panel on Thursday, Alexander Wynaendts said the markets had clearly backed Germany’s decision to ditch austerity and ramp up investment in everything from defence to infrastructure. “You could even say we got a trillion euros at no additional cost,” he noted.
Germany ends austerity with historic shift in public spending
Just last week, Germany signed off on a bold new fiscal plan that marks a clear break from its traditionally cautious approach to public spending. The move unlocks hundreds of billions of euros for modernising roads, railways, energy networks, and rebuilding national defence—a response, in part, to shifting global security dynamics.
One big driver behind this shift was the gradual pullback of US military support in Europe, particularly during Donald Trump’s presidency. With the US stepping back, Berlin felt the pressure to take more responsibility—and invest accordingly.
The good news? Financial markets have taken this shift in stride. Economists believe the plan could give a much-needed boost not just to Germany, but to the broader eurozone economy as well.
Deutsche Bank urges Germany to act fast on reforms after €1 trillion boost
Still, not everything is rosy. Wynaendts cautioned that a flood of easy money comes with real risks—especially after years of underinvestment and clunky procurement systems. “Will there be money poorly spent? Absolutely,” he said. “But we don’t really have another option.”
His bigger concern? That Germany won’t take the moment to do the deeper work. “We need to reform the tax system, simplify regulations, and rethink labour laws,” he urged. Without those changes, the impact of this investment could be short-lived.
“We simply don’t have the time to squander this opportunity,” he added.
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