Thanks to Johannes Bruder of Hamburg University for sending me this intriguing chart:

I suspect that the pattern would continue were you to include non-European countries as well; what’s interesting to me is the way in which there’s much more variation among eurozone countries than there is at the bottom of the scale, between Germany and countries like the UK and Switzerland which set their own interest rates.

As for trades, I wonder whether the chart might be pointing to a long-Ireland, short-Italy relative-value trade here. That trade has a positive carry, and if the two countries even so much as converge, you end up making a nice profit. Ireland has already shown that it’s politically grown-up enough to be able to implement tough fiscal austerity. I don’t think anybody really believes that of Italy.