Construction costs are currently skyrocketing

But not in 2023. The states borrowed money with long-term bonds during the low-interest phase; they certainly won't be rolling them over this year. It will be some time before the interest pressure from new debt really hurts.

That's right, many have done that. Austria has even issued 100-year bonds.

Germany, governed by the CDU, was instead greedy and unfortunately heavily relied on very short-term bonds, which is now impacting the budget.

Where I always wonder who actually buys hundred-year bonds with quasi-zero coupons. Due to their maturity, they are so sensitive to interest rate changes that you might as well just go into stocks ;)

Although I always wonder who actually buys hundred-year bonds with quasi-zero coupons. Due to the maturity, they are so sensitive to interest rate changes that you might as well just invest in stocks ;)

I quickly checked. 100-year bonds from Austria in 2017 have a 2.10% coupon and currently yield 2.95%. Can't complain.

The CDU-governed Germany, on the other hand, was greedy and unfortunately relied heavily on very short-term bonds, which is now impacting the budget.

Ruling alone? Who would have done anything different other than talking smart in hindsight?

I quickly looked it up. 100-year bonds from Austria in 2017 have a 2.10% coupon and currently yield 2.95%. Can't complain.

Yes, the 2017 one is still okay. But later there were also some with 0.85%. And don’t forget, the higher yield now comes because you can buy the 2017 ones at 75% of the nominal value. Those who initially invested back then incurred a 25% loss with one bond in 5 years. The 0.85% bond is now at 44% nominal value. Long-term bonds are not an investment for people with a need for security.

Ruled alone? Who would have done anything different other than talk smart in hindsight?

Did not rule alone, however, the Black Zero as a holy grail was brought forward by the CDU, and the relevant ministry was predominantly led by the CDU.

Who did it differently (not would have done), I have already answered exemplarily with Austria. You will not be alone. The USA, as another example, have been holding bonds for far too long.

Yes, the 2017 one is still okay. But later ones also had 0.85%. And don't forget, the higher yield now comes because you can buy the 2017 one at 75% of nominal value. Whoever initially invested back then suffered a 25% loss with one bond in 5 years. The 0.85% one is now at 44% nominal value. Long-term bonds are not an investment for people with a need for security.

That depends on the purpose of use. It is important not to misunderstand the bond as a stock. Certainly, it is not a financial instrument for everyone. However, the target group exists, and the state would have been wise to do as its neighbors did. But special paths are 'our' thing.