Post by account_disabled on Nov 26, 2023 23:00:32 GMT -5
The worsening of economic expectations - with uncontrolled inflation - has significantly deteriorated the risk premium , one of the most relevant macroeconomic indicators since the 2008 financial crisis. In this way, the additional cost that investors demand for acquiring sovereign debt – from the rest of the countries of the old continent instead of from Germany – has increased substantially since the beginning of the year. Today in Economía 3 we analyze the evolution of the risk premium of 10 of the most relevant economies in the Euro Zone . As we will see below, this risk indicator has increased across the board throughout the eurozone. This fact is by no means trivial, since it increases financing costs - we are talking about millions of euros - and further deteriorates the already battered public coffers of these countries. What is the risk premium ? The risk premium could be defined as the extra cost that a debt issuer has to pay compared to another issuer (which we will use as a reference). This reference issuer is assumed to have higher credit quality and, therefore, lower risk. When we talk about risk premium , we usually refer to countries.
Specifically, the extra that you have to pay for going into debt, compared to others who are perceived to have greater solvency. In this case (and as in the vast majority of cases) the reference Phone Number List asset will be the ten-year German bond. That is, how much premium (more than Germany) do these nations pay to obtain ten-year financing. Only Greeks and Italians pay more to go into debt than Spain The Greek country , with a risk premium of 234.1 basis points , is the one that pays the highest cost for 'placing' its sovereign debt. Since the beginning of January, its indicator has increased by 63.67%. It is followed, very closely, by Italy . The risk premium of the transalpine country already exceeds 200 ( 214.9 ) bp. The strong political instability - everyone will remember Mario Dragui's attempted resignation - continues to take its toll on Italy in the markets. In fact, at the height of the crisis - yet another - government, the Italian risk premium surpassed the Greek one. Spain , fortunately very far from the 2 previous cases, completes this particular podium. The Spanish risk premium is currently trading at around 113 basis points .
However, the extra cost has increased considerably since 2022 began. Thus, today the Spanish State has to 'reward' its investors almost 60% more than in January, when the risk premium stood at 71 .1 bp . The North and South polarity of Europe continues to be very valid among investors Despite being under the same economic umbrella as the European Union, investor misgivings firmly persist in the markets. The perception of country risk (which, in short, the risk premium is nothing more than an indicator of this type of contingency) that it has on the northern and southern states is far from being similar. Thus, within these 10 economies that share the single currency, the four that have a higher risk premium belong to the southern zone . Thus, the countries of the European Union that are most penalized by investors for “placing” their debt in the markets are: Gracia (234 bp) , Italy (215 bp) , Spain (114 bp) , Portugal (103 bp) Belgium and Portugal would occupy the intermediate zone, both with a risk premium located around 60 basis points. Finally, we would meet the member states belonging to the so-called northern block . Thus, the five economic engines of the Euro Zone that start with the least disadvantage, compared to Germany, in attracting financing are: France (57 bp) , Austria (53 bp) , Finland (40 bp) and the Netherlands (29 bp) .
Specifically, the extra that you have to pay for going into debt, compared to others who are perceived to have greater solvency. In this case (and as in the vast majority of cases) the reference Phone Number List asset will be the ten-year German bond. That is, how much premium (more than Germany) do these nations pay to obtain ten-year financing. Only Greeks and Italians pay more to go into debt than Spain The Greek country , with a risk premium of 234.1 basis points , is the one that pays the highest cost for 'placing' its sovereign debt. Since the beginning of January, its indicator has increased by 63.67%. It is followed, very closely, by Italy . The risk premium of the transalpine country already exceeds 200 ( 214.9 ) bp. The strong political instability - everyone will remember Mario Dragui's attempted resignation - continues to take its toll on Italy in the markets. In fact, at the height of the crisis - yet another - government, the Italian risk premium surpassed the Greek one. Spain , fortunately very far from the 2 previous cases, completes this particular podium. The Spanish risk premium is currently trading at around 113 basis points .
However, the extra cost has increased considerably since 2022 began. Thus, today the Spanish State has to 'reward' its investors almost 60% more than in January, when the risk premium stood at 71 .1 bp . The North and South polarity of Europe continues to be very valid among investors Despite being under the same economic umbrella as the European Union, investor misgivings firmly persist in the markets. The perception of country risk (which, in short, the risk premium is nothing more than an indicator of this type of contingency) that it has on the northern and southern states is far from being similar. Thus, within these 10 economies that share the single currency, the four that have a higher risk premium belong to the southern zone . Thus, the countries of the European Union that are most penalized by investors for “placing” their debt in the markets are: Gracia (234 bp) , Italy (215 bp) , Spain (114 bp) , Portugal (103 bp) Belgium and Portugal would occupy the intermediate zone, both with a risk premium located around 60 basis points. Finally, we would meet the member states belonging to the so-called northern block . Thus, the five economic engines of the Euro Zone that start with the least disadvantage, compared to Germany, in attracting financing are: France (57 bp) , Austria (53 bp) , Finland (40 bp) and the Netherlands (29 bp) .