One after the other, European countries fall into the universe of negative interest rates

Posted on Oct 15, 2020 at 6:49 am

Slowly but surely, the rates of the countries of the euro zone pass one after the other in the red zone. After Germany and the Netherlands, then France in the spring and summer of 2019, it is now the turn of countries traditionally considered to be the most risky – or the least virtuous – by investors, the countries of the South of Europe, to enter a world where they will soon have to repay less than what they borrowed on the market.

Latest marker for sovereign debt specialists, the bond issue of 3.75 billion euros of three-year bonds by Italy at the beginning of the week. An operation at first glance rather banal. Except that, for the first time in its history, Rome issued Treasury bills with a coupon of 0%. In other words, the investors who bought them will not receive any interest until the repayment. In reality, they will even lose money, since the securities have been placed at a price slightly higher than their face value.

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