There has been a spurt in New Year optimism in European markets with the successful launch of a €5bn European bond. But the good feeling appears to have not filtered down to the credit default market. In fact, it is now more expensive to insure Western European countries on their debt than emerging markets.

This chart, from data provider Markit, shows the cost of insuring government debt against default in Western Europe versus spreads in Central and Eastern Europe, the Middle East and Africa.