Barclays: Eurozone bond spreads to be driven by political risk in 2027 elections

Barclays warns that Eurozone government bond spreads are increasingly a function of political risk, citing Italy 2018 and France 2024 as precedents where fiscal weakness required a political catalyst to trigger sharp repricing. With elections due in France, Italy, Spain, Greece, and Finland in 2027, and populist parties rising, political risk could become the dominant source of bond volatility. The note implies a structural shift in how markets price euro-area sovereign debt, moving beyond pure fiscal fundamentals.