Can we expect a gradual upturn in interest rates in the euro zone?
A slow and gradual rise in euro-zone long-term interest rates would be positive: It would give borrowers the time to adjust their debt level; I t would give lenders and financial intermediaries a gradual rise in the yield on their assets, without giving rise to significant capital losses on bond portfolios. But is it possible to seriously imagine a gradual rise in long-term interest rates in the euro zone? A first problem is that if inflation and growth are low, the ECB does not want to start this move of a slow hike in interest rates; A second problem is that a long period of "economic tranquillity " would be needed, without a shock, for such a slow and steady rise in interest rates to occur; A third problem is that there is a risk of an upsurge in inflation (due to a change in labour market rules or an oil crisis) that would lead to an upsurge and not a gradual rise in interest rates.