"Portugal is overtaking Italy in the bond-market pecking order," says Aimee Donnellan on Breakingviews. At the height of Portugal's debt crisis in 2011, it cost Lisbon around 11% more to borrow for ten years than Rome. Now the ten-year yield has slipped below Italy's for the first time since 2009.
This cements an impressive rebound. The deficit will slide to just 1.3% of GDP this year, while loosening labour laws has boosted growth to an estimated 2.5% this year. The debt pile of 125% of GDP is shrinking. Italy is growing more slowly, has implemented virtually no structural change, and is politically unstable.
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