Germany rejects new EU joint debt as Klingbeil signals fiscal continuity

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2026-02-22 12:18:20

Germany rejects new EU joint debt as Klingbeil signals fiscal continuity

Investing.com

Sun, February 22, 2026 at 8:26 PM GMT+9 2 min read

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Investing.com – German Finance Minister Lars Klingbeil has shut the door on a potential shift in Europe’s fiscal architecture, stating that Berlin sees “no need” to revise its opposition to common European debt. In an interview with Frankfurter Allgemeine Zeitung on Sunday, Klingbeil backed Chancellor Friedrich Merz’s hardline stance, arguing that sufficient funds are already available.

The comments come as a direct rebuttal to French President Emmanuel Macron, who recently revived calls for joint borrowing to address the EU’s flagging competitiveness. While the debate has intensified ahead of key summits, Klingbeil emphasized that Germany’s current focus remains on “greater efficiency and speed” rather than expanding the bloc’s collective balance sheet.

Internal pressure vs. political will

Despite the government’s firm “no,” Klingbeil admitted that the domestic conversation is evolving. The finance minister noted that “new voices,” specifically Deutsche Bank CEO Christian Sewing and Bundesbank President Joachim Nagel, have signaled a fresh openness to joint debt issuance.

This shift in the financial elite’s sentiment suggests a growing divide between Germany’s political leadership and its banking heavyweights. For investors, this tension raises questions about the long-term sustainability of the EU’s “frugal” faction. If the Bundesbank continues to soften its stance, the political pressure on the Merz administration to compromise could become significant by the end of 2026.

Banking sovereignty and ECB stability

Beyond fiscal policy, Klingbeil reinforced Germany’s protectionist stance regarding its banking sector. He explicitly rejected “unfriendly” moves by UniCredit SpA toward Commerzbank AG, reaffirming the government’s commitment to the lender’s independent strategy. This “clear commitment” is intended to ward off hostile takeover attempts that have kept the European banking sector on edge.

Regarding the European Central Bank, Klingbeil moved to dampen speculation surrounding President Christine Lagarde. While rumors persist that she might step down before her 2027 term ends, potentially clearing a path for Joachim Nagel, Klingbeil insisted that her succession is “not currently on the agenda.”

Market participants will likely view these comments as an attempt to project stability. However, with the debate over “Eurobonds” reignited and banking mergers back in the headlines, the Eurozone’s largest economy remains at the center of a brewing financial tug-of-war.

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_Reporting by Simon Mugo _

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