Euro area financial integration has improved sharply since late 2022, with price‑based and quantity‑based indicators now well above the average since the start of the Economic and Monetary Union. The rise is driven by lower risk premia linked to euro‑area disintegration and policy actions such as the Next Generation EU programme. However, external financing for firms, households and governments has weakened, as higher borrowing costs and cautious sentiment push actors toward internal funds and short‑term debt. Equity‑market integration has slipped, with intra‑euro FDI falling to historically low levels, highlighting a need for policies that reduce structural barriers while maintaining cross‑border financing resilience.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
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