The attractiveness of peripheral sovereign bonds in the euro zone

As a result of the rise in long-term interest rates on core euro-zone sovereign bonds, and the likely implementation of a mechanism to stabilise yield spreads between peripheral and core euro-zone countries , if this mechanism is credible, peripheral sovereign bonds will not be riskier than core sovereign bonds and will have quite high yields. The attractiveness of these peripheral sovereign bonds for investors will therefore be very high, which will have the following consequences: A significant tightening of yield spreads between these bonds and German bonds; A significant decline in the attractiveness to investors of the riskier bonds in which they previously diversified: High Yield, LBO debt, private debt, etc.