Western European Default Risk Same as for Eastern Europe

FT runs an article today about European credit default swap (CDS) spreads. A CDS is used to insure against the default of bonds, and its spread is the annual insurance premium measured in basis points (0.01%) of the bond nominal value.

The chart above illustrates how CDS spreads of central and eastern Europe, the Middle East, Africa and western Europe converged. They argue that it is not only a sign of western Europe's debt and economic situation but also a sign of increasing wealth in emerging markets.