No. 1010 - A European safe asset? Not without the investors

Questioni di Economia e Finanza (Occasional papers)
by Giovanni Bonfanti and Juri Marcucci
June 2026
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The paper analyses why bonds issued by the European Union, despite being extremely safe, offer higher yields than the government bonds of countries such as Germany or France. Specifically, the analysis focuses on the role played by the exclusion of EU bonds from the main financial indices.

Bonds issued by the European Union are excluded from many financial indices and are therefore held by a relatively narrower investor base. This makes their yields higher and more volatile than those of some EU member states, especially during periods of financial stress and rising interest rates. Full recognition of EU bonds as European sovereign bonds, together with their inclusion in the relevant financial indices, would improve their liquidity, stability and ability to function as a European safe asset.

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  1. 03 June 2026
    No. 1010 - A European safe asset? Not without the investors
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