So far, there is no sign of governments borrowing more to meet European Commission calls they leave austerity behind and loosen the purse strings. A mountain of debt raised to weather the 2008 financial crisis continues to restrict most governments' spending, while Germany - one of few candidates for fiscal expansion - remains fixated on balancing its books.
"It is the old problem of the euro zone," ING strategist Benjamin Schroeder said. "Where you need the spending, debt levels are really high, and where you don't need the spending, you have the buffers." The only euro zone country to have sketched out 2017 borrowing plans, Belgium, scaled back an earlier estimate and is forecasting it will raise less than in 2016.
Across the bloc, ING expects a rise of 20 billion euros ($21.22 billion) to around 885 billion of issuance next year, Morgan Stanley predicts a 27 billion hike to 876 billion, and Commerzbank sees a 40 billion increase to 900 billion. The bloc's two biggest economies, France and Germany, are expected to unveil funding plans in the coming weeks. The other main economies, Italy and Spain, will publish plans in January.
The need for fiscal stimulus has arguably never been higher. A large swathe of the electorate who felt they had not benefited from a modest economic recovery since the financial crisis, voted Britain out of the European Union and political outsider Donald Trump into the White House this year. This backlash now threatens the political establishment in Europe with France, Germany the Netherlands, and possibly Italy, all set for elections in 2017.
Meanwhile, there are signs the monetary stimulus on which the euro zone has relied since 2012 may have peaked. European Central Bank President Mario Draghi's has repeatedly called for governments to complement his easy policy approach. Morgan Stanley's head of European rates strategy, Anton Heese, said that even if some governments offer giveaways to try to sway voters this year, the additional spending may take years to filter through, or show up in the bond issuance.
"Even if the government commits to quite a substantial fiscal expansion, unless there are a lot of projects that are shovel-ready, the actual increase in borrowing can take place over a long period of time," said Heese. Heese said the main problem is that the EU only punishes countries that do not stick within tight budgetary criteria, but has no way to incentivise spending. Euro zone finance ministers earlier this month rejected a European Commission proposal to set a target for fiscal stimulus for the bloc next year.
Some banks appear more optimistic on fiscal expansion in the euro zone next year. "There will be a lot of emphasis in run-up to the elections in Europe next year on more fiscal spend. The period of fiscal austerity is over," Robert McAdie, global markets head of research and strategy at BNP Paribas, said.