Bond buyers exercised greater scrutiny and a series of rating downgrades prompted investors to re-evaluate their belief that European  BIS central bankers’ speeches  5  government bonds are risk-free assets. This led to a differentiated perception of European government bonds and diverging yields for the individual countries. To a certain degree, the increased spreads seem to be justified.
They reflect diverging fundamentals in different countries – ie the different economic situation and levels of public debt. It is questionable whether the convergence of yields in the years before the crisis reflected the right assessment of the various risks underlying these investments. Currently, refinancing conditions for the peripheral countries have improved notably. Hence, OMT will hopefully never have to be activated.