The European Stability Mechanism (ESM) has integrated Greek government bonds in the “club” of highly-rated European sovereign bonds.
As it stated in a report published on its blog, Greece’s sovereign yields have converged with many of its peers, reflecting the strong recovery of the Greek economy and fiscal surpluses.

This suggests that Greek and highly-rated European sovereign bonds are once again perceived as substitutes, signalling a renewed integration of bond markets. This renewed integration exposes Greece to different spillovers from abroad.

On the other hand, this reintegration of Greek bonds exposes Greece to various influences from abroad. For example, Germany’s fiscal expansion announced in March 2025 raised yields not only in Germany but also to a similar extent in Greece, underscoring the need to continuously monitor evolving risks to sovereign bond financing conditions.