The German Finance Agency projects a substantial and increasing need for federal funding in the coming years, estimating annual requirements that could reach 500 billion euros and potentially exceed that figure.
Tammo Diemer, CEO of the Finance Agency, told the Frankfurter Allgemeine Zeitung that a growing financing need is anticipated over the next few years. To accommodate this, the agency has already revised its issuance plans for 2025, increasing the planned debt uptake by 34 billion euros. He highlighted the continued high demand for German government bonds, noting that, on average, orders have exceeded the offered volume by a factor of 1.7 this year.
Regarding the rise in interest rates for long-term German government bonds, Diemer attributed the increase to a compensation demanded by investors due to market uncertainties. He emphasized that this isn’t driven by concerns about creditworthiness, but rather a reflection of broader market instability. This widening interest rate differential between thirty and ten-year bonds is a globally observed phenomenon affecting major currency areas.
Eva Grunwald, Co-CEO of the Finance Agency, addressed the federal government’s stake in Commerzbank and the potential acquisition plans of the Italian UniCredit bank. She stated that UniCredit’s approach lacked confidence-building measures. While the federal government’s stake of 12.6 percent remains above the break-even point, there are currently no plans to sell further Commerzbank shares. The interministerial steering committee has decided to maintain the existing position “for the time being”.