German finance minister blames ‘Trump’s Iran war’ for rising bond yields

Germany’s vice chancellor and finance minister said Monday that rising borrowing costs in recent weeks are “the result of global uncertainty triggered by Donald Trump’s war in Iran.”

Lars Klingbeil, a member of the center-left Social Democratic Party, made the remarks after a meeting of German-speaking finance ministers in Liechtenstein.

“This war has changed nothing for the better in the region; it has also had profound economic effects on us,” Klingbeil said, according to the German news agency dpa.

He said people in Germany and elsewhere were feeling the impact daily “at the gas stations.” The conflict, he added, was also rippling through financial markets, unsettling investors and pushing interest rates higher as government bond yields climbed.

Yields on government bonds, including benchmark 10-year German bonds, have risen sharply in recent weeks. Higher yields make new borrowing more expensive and add pressure to Germany’s already tight federal budget.

Klingbeil renewed his call for a windfall tax on oil companies that have recorded higher profits because of the conflict. He said such firms should pay more when they benefit from sharply rising prices.