LONDON: Euro zone governments' have eased up on efforts to overhaul their struggling economies because ultra-easy central bank policy has pushed their borrowing costs to record lows, ratings agency Standard & Poor's said on Tuesday.
"We see a very strong relationship between government bond yields and the willingness (of governments) to engage in structural reforms," S&P's top EMEA analyst, Moritz Kraemer told investors at a conference in London.
"The moment the pressure goes away, the action goes away as well. All of these (reform) efforts from the governments have really fallen by the wayside under the palliative that the ECB (European Central Bank) is providing."
The ECB's 1.7 trillion euro asset purchase scheme has helped pushed government bond yields across the euro area lower, with German bond yields out to eight years in negative territory .
Comments
Comments are closed.