According to Reuters, citing surveyed experts, the euro has strong potential for steady growth. The yield gap between Greek and German bonds has narrowed to its lowest level since 2008, while Italian debt securities are nearing their 2010 peaks. These developments demonstrate a significant strengthening of Europe’s finances following the economic crisis.
The current political stability across the bloc and credible debt-reduction policies have boosted investor confidence, the agency reports. Since late 2023, Italian banks have benefited from both rising risk asset prices and the European Central Bank’s policy easing. As noted by UBS strategist Reinout de Bock, long positions in Italian securities are gradually increasing.
Experts particularly highlight Spain, where GDP grew by 3.2% last year, triple the eurozone’s 0.9%. According to Investing.com, the country’s budget deficit is projected to fall from 3.2% to 2.5% by 2026.
This renewed confidence in Europe’s prospects has already driven stock prices higher. As reported, Italian and Spanish stocks have risen 15% and 20%, respectively, since the start of the year.