Bloomberg reports that Europe’s market for state and local debt is on its way back to pre-pandemic size.

As businesses reopen and tax revenues fill government coffers, finance officials are winding down their emergency programs and reining in expansive borrowing. Bond sales have already dropped dramatically from last year’s peak, and experts at JPMorgan Chase & Co. and UniCredit Bank predict the market will soon return to levels similar to 2019.

The shrinking market is bound to frustrate government debt investors, who view state-level European debt as a good way to squeeze a little extra yield out of ultra-safe issuers. 

“Issuance volumes will inevitably decline,” said Matthias Dax, a credit analyst for sub-sovereigns, agencies and ESG at UniCredit in Munich. “It was only an extraordinary effect of the coronavirus crisis.”