This is also why the Governing Council decided to make bonds issued by all euro area sovereigns, including those issued by the Hellenic Republic, eligible for purchases under the PEPP. Nevertheless, financial conditions today remain tighter than they were in mid-February, even for sovereigns with higher credit ratings, such as the Netherlands or France.
There are two broad reasons for why this might be the case. The first relates to the fiscal and economic implications of the crisis. The lockdown has caused a substantial increase in the issuance needs of sovereigns, putting upward pressure on sovereign yields (slide 3, left chart).