BERLIN- A fiscal policy expert from Germany's Free Democrats (FDP) said on Wednesday that a return to positive yields on federal bonds will wipe out a budget buffer that has existed in recent years.
The lack of that buffer will have an increasingly large impact over the course of the year, Otto Fricke told Reuters.
"I expect interest spending to at least double in 2022, though from a low level," added the expert from the business-friendly party, which controls the German finance ministry.
Germany's 10-year bond yield rose above 0% for the first time since May 2019 on Wednesday, marking a potential turning point for euro area debt after years of negative yields thanks to copious central bank support fighting deflationary forces.
(Reporting by Miranda Murray, editing by Emma Thomasson) ((Miranda.Murray@thomsonreuters.com;))
