European nations' recent security auctions were a surprise success.
The euro-zone has been contending with some member states' untenable debt levels in recent months. Even the most stable country in the region, Germany, has faced pressure to cut back on government spending; it announced that it would do so this week.
Because of the debt problem, medium-term outlooks for the euro-zone are anything but cheery. Royal Bank of Scotland Group predicted June 8 that nations that tap the region's €440 billion bailout fund would be stigmatized by investors - who, the bank says, would still fear that bailout recipients could default.
Yet Germany and Portugal sold bonds easily on June 9, shortly after Austria, Belgium and the Netherlands had their own successful debt auctions. "The auction results today send reassuring signs," UniCredit analyst Chiara Cremonesi wrote in a June 9 research note.
The well-received debt issuances follow good news out of Germany, where unemployment fell in May at more than twice the rate that analysts had predicted. While euro-zone plays remain risky in the short-term, there do appear to be signs of life in Europe - and indications that investors have not given the region up for dead.
