It is the elimination of exchange rate risk that is driving this process of market integration, the major feature of which has been a far-reaching convergence of long-term interest rates. This process started well before the launch of the euro, when markets gradually began to anticipate that EMU would become a reality.
As a result, interest rate differentials between 10-year government bonds of euro member states have narrowed to a range that, usually, does not exceed 40 basis points these days.