The decline in spreads recorded in several euro area countries was more contained in Italy and Portugal due to the political uncertainties of this summer. This is what the European Central Bank notes in the November edition of the Financial Stability Review.
“After the significant easing recorded in the second half of 2012 – reads the report – tensions on sovereign debt have remained contained despite the volatility of global financial markets”. Spreads, continues the ECB, are "around the same levels as in May this year" but overall they have fallen in many countries to the extent of 55 basis points in Spain, 50 points in Ireland, 30 in Italy and 25 in Portugal.
According to the Eurotower “the relatively less favorable developments in these last two countries may be related to the political uncertainty during the summer. But in stark contrast to the more severe tensions of recent years, these uncertainties at the country level have been interpreted by the markets as transient rather than systemic with a limited effect on sentiment”.
