As Italy sold 10-year bonds on Tuesday at a record-low yield of less than 2 percent, rates on similar-maturity Greek debt were spiraling toward 10 percent.
Compare that with 2011, when Greece’s troubles were grouped with Portugal, Ireland, Italy and Spain and Italian borrowing costs exceeded 7 percent.
Euro-area government bonds are rounding out their best year since 1995 as slowing growth and inflation prompt the European Central Bank to respond with unprecedented stimulus efforts.
Its action is helping to prevent the sell-off spreading from Greece, which faces snap elections next month.
“Greece is no longer the existential threat that it once posed,” said Ciaran O’Hagan, head of European rates strategy at Societe Generale SA in Paris.
“You can isolate a country without there being a huge wave of contagion.”
A glance at this year’s returns on the region’s sovereign debt confirms as much.
Greek securities were the worst performers, eking out a 0.4 percent gain.
Portugal’s, the best, earned almost 22 percent, and those from Spain, Italy and Ireland all posted returns of more than 13 percent, according to Bloomberg World Bond Indexes.
“The auctions clearly were very strong and they were particularly strong given the background of Greece and possible risk aversion,” SocGen’s O’Hagan said.
“The ECB is certainly helping, but it’s also because the nature of the Greek problem has changed.”
Greece’s 10-year yield rose five basis points to 9.59 percent.
It reached 9.85 percent on Monday, the highest since September 2013.
The three-year note yield jumped 131 basis points to 13.40 percent.