The European Council has reaffirmed its commitment to the financial stability of the euro area. In no country is there an alternative to credible fiscal consolidation, the necessary, but not sufficient, condition for strengthening the outlook for growth. For years interest rates in the various parts of the euro area did not diverge significantly from those obtaining in Germany.
For a long time the spreads between sovereign securities and German Bunds remained narrow and the interest rates charged by banks reflected the credibility of the public securities of the euro-area countries.