Europe’s debt crisis is a continuation of the global financial crisis and also the result of how Europe attempted to solve the global financial crisis that brought an end to a decade of prosperity and unrestricted debt. European attempts at defending itself against a deep recession, has now created a new crisis of unsustainable and un-serviceable sovereign debt.
Much of this can be attributed to stimulus packages passed by European governments in order to halt the effects of the economic crisis, especially in preventing massive layoffs. Europe’s heavyweights spent massively on stimulation packages. However such attempts at defending themselves against a deep recession, has now created a sovereign debt crisis. Sovereign debt is the money governments borrow and promise to pay back over a number of years. This gives a government access to large funds instantly, which it repays in instalments over a number of years. As a government guarantee’s the debt, this type of debt is considered the most secure. This is why US treasury bonds are thought to be the most secure investment globally as the US government itself underwrites them. Read more>>>
No comments:
Post a Comment