Bond Traders Push EU Rebels Into Deals They Long Rejected
- Surging yields raise costs of EU defiance for Hungary, Poland
- Nations are moving closer to unfreezing billions in EU funds
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In the span of 18 hours last week, years of rigid intransigence from the European Union’s two most rebellious nations melted away. First Hungary and then Poland agreed to take steps to address shortcomings in their democracies in exchange for billions of euros of funding that the EU is withholding.
This was, perhaps above all else, a testament to the new-found powers of the bond market. In an era of soaring inflation and rapidly rising borrowing costs, bondholders have the ability — for the first time in years — to exert pressure on governments whose policies concern them.