Spanish government bond yields, which previously had been 500-600 basis points (5-6 percentage points) higher than U.S. and U.K. bond yields are now slightly lower than them, with Italian yields (who used to be as high) also being only slightly higher.
What’s behind this dramatic drop? The ECB. First and foremost is of course the pledge of the ECB not to tolerate yields that would bankrupt the Spanish and Italian goverments with potentially unlimited asset purchases. The ECB didn’t have to actually buy any bonds, the pledge alone caused investors to start buying those bonds.
Secondly, the unjustified concerns about low inflation in the euro area have caused the ECB to pursue measures to raise inflation, including a negative deposit rate. This have pushed down all euro area interest rates, not just in the crisis countries but also in German. In the past, German bond yields were only slightly lower than British and American, now British and American yields are twice as high.