How Russia is affecting everyone, Germany’s borrowing costs hit 15-year high on defense spending

Germany’s borrowing costs reached a 15-year high on Wednesday as the country faces increased security challenges following Russia’s invasion of Ukraine, the Finance Ministry said.

German 10-year and 30-year borrowing costs hit fresh 15-year highs during trading on Wednesday. Bond yields in other major Western economies, including the United States and Japan, also climbed to multi-decade highs this week.

The rise in borrowing costs stems from growing government debt and geopolitical tensions, which are increasing borrowing expenses for companies and households while complicating policy decisions.

“In light of Russia’s aggression… the security situation in Germany has changed profoundly. Massive investment in security and defence is therefore required,” a Finance Ministry spokesperson said in a statement, as cited by Reuters.