For families and consumers as a whole, the beginning of each year is marked by the well-known January slope. Something similar has happened to the debt market, which has experienced its own "January slope" during these first days of the month. In a relatively short period of time, just two weeks, this market has suffered profound ups and downs. After the storm in the sovereign debt market (for some peripheral EMU countries), the calm has arrived, although it will almost certainly be temporary.

Last week was undoubtedly crucial for the debt market of some peripheral EMU countries such as Greece, Italy, Portugal and Spain, which had to place very significant volumes. In addition, in the days leading up to these auctions, their "country risk" premiums rose to their highest levels of the year, as in the case of Spain. Greece, Italy, Portugal and Spain managed to pass this week's test , so far the first serious test of the year, with grade . This week's debt auctions have generally been a success both in terms of demand and price, which has been somewhat lower than initially expected by analysts. The good results in this week's placements can be explained by two elements.

On the one hand, the purchase of Portugal's public debt by the European Central Bank (ECB) and, on the other, the extension of the bailout fund provided by the European Union. Both factors have helped to reduce tensions in the debt markets, which has been reflected in lower country risk premiums. Once again, the European Central Bank, the ultimate lender written request, has stepped in and opted to buy a significant volume of Portuguese Treasury debt. At the same time, the European Union decided to extend the so-called bailout fund and the reception by the markets as a whole was very positive, especially the stock market.

Pending reforms

The first major economic and financial crisis of the 21st century and, above all, the recent tensions in the sovereign debt markets that began in the spring of 2010 remind us that the loss of fiscal sovereignty is a reality. States must face fiscal consolidation programs that are both far-reaching and, above all, credible to the markets. Fortunately, last week we had the support of the ECB and the backing of the European Union, and managed to place all the debt auctions. However, we should not expect unconditional and continuous support over time from the European Central Bank or the EU, as the markets value very positively the attitude of countries that maintain balanced public accounts (at state, regional and local level) and that undertake reforms to tackle structural problems. The markets have given us a truce, but, for now, it does not seem very likely that we should consider the tensions over sovereign debt to be over, since a large part of the homework (think, for example, of the reform of the pension system) is still on the table.