Italy And France yes, according to Oxford EconomicsEurozone countries most at risk increase in bond yields. On the contrary, in both negative scenarios studied at home, Hellas looks safe as its public debt continues to decline. In any case, according to analysts, the eurozone will be able to avoid a new debt crisis even under the most extreme scenario.

Oxford Economics acknowledges the risks to eurozone government debt and warns that if bond yields rise much higher than expected, countries’ public finances will be hit hard and governments will be forced to make tough decisions.

In this regard, the house “conducted” a stress test with two negative scenarios. In the first case, bond yields remain at the highs of the last decade, leaving the eurozone debt-to-GDP ratio hovering around 90% by 2032 (again, up from 93% in 2022).

The second scenario assumed bond yields would peak at 100 basis points higher and stay there, pushing debt up to around 95% by 2032 (but again below the 100% high seen during the pandemic ).

According to an analysis by Oxford Economics, the countries most exposed to rising yields are Italy and France. In the first scenario, Italy’s debt-to-GDP ratio will remain unchanged in 2032 from its current level of 145%, while in the most negative scenario, debt will exceed 150% of GDP, moving well above the current projections they want it to be. 138% of GDP in 2032.

In the case of France, debt is around 120% of GDP in the first scenario and below 130% in the worst case scenario. These are levels that have been recorded in France for decades.

Following this, the House of Representatives warns that if the markets become impatient because of the debts of the eurozone countries, Italy and France will become the most obvious targets. However, past experience has shown that market conditions can deteriorate very soon and affect the bonds of other countries.