Country Risk: Euro Area Core

This is the second edition of the Country Risk Series, and the first to move beyond the United States. The Euro Area's canonical dataset turns out to be genuinely rich -- 27 series -- and includes something the first edition explicitly could not: a full, seven-tenor sovereign yield curve, currently upward-sloping and showing no inversion, from 2.30% at three months to 3.62% at thirty years. Inflation tells a more nuanced story than a single snapshot suggests. Core HICP has held a stable, narrow range -- 2.2% to 2.7% -- for the past eighteen months. Headline HICP has not: it ran consistently below core through most of 2025, then spiked sharply higher in spring 2026, from 1.9% in February to 3.2% in May, before easing to 2.8% in June. Government debt stood at 87.8% of GDP as of the most recent annual reading, meaningfully lower than the US figure of 122.6% documented in Publication #4. The ECB's deposit facility rate stands at 2.25%, and M3 money supply growth registered 3.20% year-over-year in May 2026.