Blood for bonds: Why governments are now competing for their citizens' money

Governments are increasingly turning to domestic savers to absorb growing debt issuance as traditional buyers retreat, making sovereign-bond yields a price for fiscal and political risk.

• Romania offers blood donors access to bonds yielding up to 7%, with the minimum investment cut from 5,000 to 500 lei; the programme raised about 2.8 billion lei from tens of thousands of retail investors since early 2025.
• The shift reflects fewer purchases by central banks, higher risk premiums demanded by foreign private investors and widening budget deficits, while domestic investors tend to buy regularly and sell less readily in panics.
• Romania’s 2025 deficit reached 7.9% of GDP, the highest in the EU, and Moody’s rates it Baa3, only one notch above speculative grade, showing why its high coupon represents a risk premium and a higher fiscal cost.
• In the United States, the Fed raised its policy rate to 3.75–4.00% in September, oil reached as much as $108 a barrel, and the average 30-year mortgage rate climbed to 7.37%, even as private-sector growth hit its fastest pace in more than five years.
• France’s 10-year spread over Germany exceeded 100 basis points for the first time since the 2011–12 euro crisis, while Germany’s roughly €3.6 trillion of bank savings could become relevant as infrastructure and defence financing needs grow.

Takeaway: Investors should treat sovereign yields as compensation for specific fiscal, political and credit risks; Ethenea therefore favours highly rated issuers and long maturities, while warning that weaker borrowers are exposed first.