Era of Bund scarcity is over, says German debt chief

The European Commission has proposed revisions to EU debt securitisation rules to reduce capital charges for banks and streamline regulations, aiming to invigorate the securitisation market and boost economic competitiveness. While the changes, including lowering risk weights and simplifying investor obligations, are intended to enhance funding availability, critics argue they may compromise financial stability and international standards established post-2008 crisis. Need More Context? 🔎

Germany's Bundesbank has criticized Chancellor Friedrich Merz's reforms to encourage later retirement, stating they are insufficient to alleviate the fiscal pressures of an ageing population, where early retirement is prevalent due to existing incentives. The central bank suggests more significant policy changes, like linking the retirement age to life expectancy, to address the impending demographic challenges effectively. Need More Context? 🔎

The EU is proposing to revise merger rules for defense companies to attract investment in the arms industry, highlighting the need to boost weapons manufacturing amid the ongoing war in Ukraine. This includes considering "defense readiness" positively in merger evaluations and clarifying compliance with environmental standards, despite concerns from sustainability advocates about diverting funds from climate initiatives. Need More Context? 🔎

The scarcity of German Bunds has ended, according to Tammo Diemer from Germany's finance agency, as increased sales fund a €1tn defence and infrastructure package. This shift follows the European Central Bank's cessation of bond-buying, leading to greater availability of German bonds and heightened interest in AAA-rated euro debt from global investors diversifying away from dollar assets. Need More Context? 🔎

Brussels is contemplating using funds from an upcoming carbon tax on petrol and home heating to address a €30bn annual budget shortfall, despite strong opposition from member states like France and Poland. The tax, set to begin in 2027, could generate €705bn by 2035, but fears of rising costs may reignite public protests, complicating the EU's financial strategies. Need More Context? 🔎

The EU has decided against holding the EU-China High-Level Economic and Trade Dialogue before the leaders' summit in July, citing unresolved trade disputes, including tariffs and market access issues. This decision highlights ongoing tensions, especially as China faces criticism for its export restrictions and the summit will be attended by Premier Li Qiang instead of President Xi Jinping, seen as a diplomatic snub. Need More Context? 🔎