Bund yields near the August high with fresh energy subsidies in sight

<p>Rising bund yields reflect the difficult predicament for German policymakers.</p><p>German borrowing costs threatened the highest levels since 2011 and the rise came in part due to reports that energy subsidies are being pondered for German industry.</p><p>I <a href="https://www.forexlive.com/news/theres-no-help-coming-for-german-industry-20230830/" target="_blank" rel="follow">wrote </a>at the end of August about signs that Germany's government had rejected power subsidies and the economic pain that might cause. </p><p>On the weekend, Handelsblatt <a href="https://www-handelsblatt-com.translate.goog/politik/deutschland/energie-so-kann-die-bundesregierung-den-industriestrompreis-finanzieren/29393654.html?share=twitter&amp;_x_tr_sl=auto&amp;_x_tr_tl=en&amp;_x_tr_hl=en-US&amp;_x_tr_pto=wapp" target="_blank" rel="nofollow">reported </a>that the federal government has found a way to remove a the financing hurdle. The solution could come from the Climate and Transformation Fund </p><p>The move is being roundly mocked, and deservedly so, but I don't think Germany had any other option. Here's how <a href="https://twitter.com/MuffinmanMagic/status/1702994478552781016" target="_blank" rel="nofollow">one person put it</a>.</p><ol><li>Waste €600 billion on unreliable Energy
</li><li>Shut down nuclear power
</li><li>Spend €30 billion power subsidies to keep industry alive
</li><li>Exit coal (2030)
</li><li>Probably spend a gazillion € on polish and french power</li></ol><p>So far, there is only about €15 billion available so the spending won't be material but a decision is now said to be coming before month end.</p>

This article was written by Adam Button at www.forexlive.com.