Several years ago (in 2011) we were closely monitoring interest rates in Europe, especially Italian and Spanish government bonds.  During 2011 their interest rates were soaring which indicated investors feared another Greece type of default
was possible.  Many experts believed if Italy or Spain were to default, then France would probably default and the
future of the European Union would be jeopardized.

Things have changed in Europe. The moves by the European Central Bank sent yields on Spanish and Italian government bonds tumbling to record lows, with the former’s 10-year down to 2.642% on Friday, a massive drop from 7.75% in July 2012 when Draghi made his famous declaration to preserve the euro. Italy’s 10-year yield hit 2.743%, while Ireland’s 10-year ended at 2.464%, helped by a Standard & Poor’s upgrade to A-minus from BBB-plus. At the core of the euro zone, Germany’s 10-year yield slid to 1.35%, while France’s 10-year was down at 1.706%. In contrast, the U.S. 10-year ended the week at 2.592%, while the corresponding United Kingdom gilt was at 2.654%. Clearly, the euro zone’s bond yields reflect the likelihood that the ECB will maintain near-zero short-term interest rates for a long while and the likelihood of a default by Spain or Italy has decreased dramatically.