EMU Convergence: Maybe the party’s over

In 1996, the convergence rally on high-yielding European government bonds was one big, premature Emu party, staged in the belief that all the governments that said they'd be ready for first-round entry to the eu's single-currency system would be. Market enthusiasm was based on taking note of contender countries' political commitment to European economic and monetary union rather than their economic fundamentals. This year bullishness will be replaced by a more cautious approach, as the markets become increasingly volatile.