Within the euro zone, highly charged negotiations around euro bonds and now the Recovery Fund have already tested euro zone cohesion and resolve. Thanks to the pandemic, the likelihood of sovereign default and/or possible exit from the euro zone may now increase further.
This article was published by IPE.
Viewpoint: Managing euro zone sovereign risk in the face of the pandemic
In the face of economic instability due to the COVID-19 pandemic, institutional investors would be wise to consider sovereign risk carefully, even where not explicitly mandated to do so by regulation.