Sorry, Europe, the Crisis Isn't Over Containing the North Korean Threat

摘要

Financial conditions in Europe are improving, and the sense of imminent doom has lifted. Some commentators are daring to say that Europe's economic crisis is over. We think they speak too soon. It's true that some crucial indicators look better. Governments that were on the brink of bankruptcy last summer have seen bond yields fall to supportable levels. Six months ago, Spanish 10-year bonds paid more than 7 percent; today the rate is 5.2 percent. Italy's 10-year borrowing cost has fallen from 6.5 percent to 4.3 percent. And this week, Italy sold €8.5 billion ($11.5 billion) of six-month bills at 0.731 percent, the lowest rate in almost three years.