S&P: Low bond yields in eurozone cause complacency

Euro-area bond yields near record lows are leading governments to be complacent, according to Standard and Poor’s head of sovereign ratings Moritz Kraemer.

The reduction in borrowing costs across the region, resulting from European Central Bank (ECB) stimulus measures, risks removing governments’ incentive to improve their fiscal position, Kraemer said during an interview on Bloomberg Television’s On The Move with Jonathan Ferro in London.

“The risk is indeed of complacency — that national governments think the rates are at historic lows because of their achievements on the reform agenda, while in fact, most of it is due to the monetary policy stance,” Kraemer said.