The Spread hits grassroots with a bang
Year-end festivities in Naples are not for the faint-hearted. The locals’ idea of fun is to light illegal firecrackers and toss them from windows and rooftops in china pots.
These home-made mini-bombs are usually dubbed after weapons, film stars or football players as a sign of their potency. But the latest concoction marks a break from this naming tradition. A banger of reputedly monstrous strength, it is called “The Spread” after the difference in interest rates between 10-year Italian bonds and their benchmark German equivalent.
When something as obscure as the bond market has entered public language, you know that something big has happened.
The spread indicates the cost of a country’s borrowing: every percentage-point increase translates into a bill that can be billions of euros. It tips a hugely indebted, struggling economy that bit closer to bankruptcy – unless a government musters the resolve to cut welfare programmes, reduce bureaucratic payrolls or increase taxes.

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