The European Stability Mechanism (ESM), Greece’s largest lender, ranks Greek government bonds among the strong performers of the eurozone. In a report published today on its blog, the ESM notes that during the crisis years, yields on Greek government bonds exceeded those of other European bonds, as sovereign bond markets became fragmented.

In recent years, however, yields on Greek government bonds have converged with those of many other countries, reflecting the strong recovery of the Greek economy and the achievement of fiscal surpluses.

On the other hand, this reintegration of Greek bonds exposes Greece to various external influences. For example, Germany’s fiscal expansion announced in March 2025 pushed yields higher not only in Germany but also, to a similar extent, in Greece—highlighting the need for continuous monitoring of evolving risks to sovereign bond financing conditions.

According to the ESM, the benefits of reintegrating Greek public debt into the broader European bond market are clear. Greece can borrow and refinance its debt at favorable interest rates. At the same time, however, this reintegration exposes the country to new risks. Debt dynamics in core eurozone countries now affect Greek bond yields to the same extent as they affect the yields of the issuing countries themselves.