The man who drove a car into a crowded Christmas market in Berlin, killing 12 and injuring dozens more, has been sentenced to life imprisonment. For the markets, this verdict represents a rare moment of fiscal closure. The attack, which sent shockwaves through European bonds and triggered a brief spike in the VIX, had exposed the cost of security failures.
Now, with the perpetrator facing the full force of German law, UK counter-terror chiefs have praised the cross-border co-operation that brought him to justice. But let us not mistake due process for a solution to systemic risk. The attacker, an asylum seeker with a history of petty crime, was known to authorities.
Yet he slipped through the net, a failure that echoes the moral hazard embedded in our public spending. The life sentence, while satisfying on a human level, does not address the underlying deficit in security infrastructure. In the aftermath, gilt yields barely twitched, a sign that investors have already priced in the inefficiencies of European security co-ordination.
The real lesson from this tragedy is not one of justice but of fiscal prudence. We cannot insure against every tail risk, but we can demand better returns on our security expenditure. The German court may have handed down a life sentence, but the market will continue to scrutinise the balance sheet of national safety.
For now, the verdict is a credit to European judicial co-operation. But the true test will come when the next threat emerges, and we must ask whether our investment in prevention has been adequate.
