Why Europe can’t escape the fallout from $40 trillion US debt woes
War and Big Tech's AI dreams are only making the global fight for capital more intense.
The $40 trillion debt held by the United States government is increasingly becoming a concern for the entire world, with government borrowing costs around the globe reaching their highest in years. This high borrowing cost is causing ripple effects in financial markets, particularly in Europe, where European governments must compete for the global pool of savings.
Germany's 10-year borrowing costs have hit their highest since 2011, while the benchmark U.S. 30-year Treasury bond yield has reached its highest in 19 years. The news of the U.S. debt surpassing $40 trillion has put added pressure on European governments to consider tax increases or spending cuts when they return from their summer breaks to plan their budgets for next year.
This situation is likely to affect national elections in countries such as France, Spain, and Italy, where far-right leaders and incumbents are using the bond yield situation to their advantage.
Written by urgent.news from Politico EU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
