Spread breaks the 60-point wall: halved in a year
The Bund differential falls to 59. Recoveries also in France, Spain and Greece
The spread in yields between BTp and Bund continued to close, and today the spread fell to 59. In one year, the distance between Rome and Berlin has halved, falling by 58 basis points.
The result is the result of a small further step on a road that has been going on for several months now. The Italian ten-year closed at 3.40 per cent, limiting Wednesday's 3.41 per cent, while the Bund of the same duration experienced a slight rise, from 2.78 per cent to 2.82 per cent. Small movements, of course, but they did break the 60-point threshold because they mark the last stage (so far) of a path that throughout 2025 has seen Italian bonds go against the trend with respect to a rather generalised rise in coupons in the Eurozone.
According to another benchmark, used by the Bloomberg platform, the spread is still at 63 points, but the substance does not change. The Italian ten-year yield today is 29 basis points lower than on the same date a year ago, while the Bund has followed a mirror-image dynamic, increasing by the same 29 points over the past 12 months.
The German factor and the European comparison
The rise of the German bond, fuelled by the Merz government's decision to abandon the constitutional debt brake in order to finance the maxi programme of rearmament and infrastructure investments, has closed all the main spreads in the euro area: but the record in this trend is Italian. Compared to a year ago, the -58 point differential of the BTp compares with the 15 points lost by France, which is grappling with a public budget that is increasingly difficult to control and has not yet managed to approve this year's manoeuvre. Without a budget law, now for three years, is also Spain, which, however, is experiencing a (persistent) phase of lively growth: in any case, the spread in Madrid has 'only' narrowed by 28 points. Greece, the other Mediterranean country where GDP growth is robust (+2.1% in 2025 according to EU Commission estimates) has shortened the distance to the Bund by 30 points in a year. With these results, BTp bonds can catch up with Greek ten-year bonds (5 basis points away), while they continue to outperform French bonds (here the distance is 9 points). BTp bonds are also the only ones in the Eurozone not to have increased their yield even on the 30-year horizon, while on the shorter end of the curve (-40 points in 12 months on the one-year maturity) their behaviour is in line with their European counterparts.
Fiscal regulations
In short, the numbers are clear, and they measure the effects of that fiscal discipline that fuelled some grievances in the majority a few weeks ago, in the complicated days of the manoeuvre in the Senate, but also produced the seven rating or outlook improvements lined up in 2025 alone.
