In regard to euroindexed loans, financing conditions improved not only thanks to low interest rates in the European money market, but primarily owing to the sharp fall in the country risk premium, driven chiefly by the positive impact of domestic factors.
For instance, in Portugal the credit boom that began 1995, as entry into the euro seemed more and more assured, implied that the private sector balance fell from +5% of GDP in 1995 to –5.2% in the year 2000. That is a 10 p.p. variation in 5 years. As the public deficit improved on by 1.7 p.p.