Chart of the Week: Falling bond yields herald new Greek government

Sunday’s general election saw Greece’s centre-right New Democracy party win an outright majority in parliament. The result had been widely expected with the spread of Greek government bond yields over their German counterparts falling by roughly 70 basis points over the past month. The fiscal adjustments made by previous governments mean that Greece’s public finances are manageable in the short term, but the country’s elevated debt burden still limits the scope for any dramatic loosening of fiscal policy.

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