Global investors only treat a country's debt as a 'safe haven' if the ruling political coalition is getting along.
March 31, 2026
Original Paper
Safe-Haven Flows into the German Bond Market and the Role of Policy Disagreement 
SSRN · 6426439
The Takeaway
Using data from German parliamentary speeches, researchers found that safe-haven capital flows into German bonds drop significantly when the internal parties of the government bicker. Surprisingly, loud disagreements with the political opposition don't scare investors at all—only cracks within the ruling partnership destroy the perception of safety.
From the abstract
German government debt is considered a safe asset in times of turbulence. We estimate the impact of changes in the risk appetite of global investors on weekly investment fund flows into the German sovereign bond market. Our key contribution is to allow the impact of such shocks to depend on the extent of disagreement about the path of fiscal policy, which we measure from the texts of all speeches delivered in the German Bundestag. An increase in global risk causes strong inflows into German gove