Nobody could say what Europe would be tomorrow because future changes that are triggered by today’s changes are unpredictable”. The setting up of the single currency has been a remarkable success, acknowledged in Europe as well as across the entire world. However, to fully exploit the benefits of the euro, Europe needs to face important challenges that require major policy measures.
Bond markets also show clear signs of integration. We observe that over the past ten years, bond yields are being increasingly driven by factors common to the euro area, rather than by purely local factors. At the same time, euro area investors are seen to be progressively diversifying their portfolios on a cross-border basis.