Das, S., (2013), “The Return of Europe’s Debt Crisis”, EconoMonitor, 16 Οκτωβρίου.
Since mid-2012, the European financial crisis has been in remission, with the symptoms of the underlying disease temporarily suppressed. As treatment is discontinued and drugs lose efficacy, there is a high probability of a relapse.
Taking the Waters…
A combination of austerity programs, debt write-downs, the European Central Bank’s (“ECB”) commitment to “do whatever it takes” to preserve the Euro, the proposed banking union and the finalisation of the primary bailout fund (European Stability Mechanism (“ESM”)) helped restore relative financial stability. There were falls in the interest rates of peripheral countries and a rally in stock markets, although no meaningful recovery in the real economy.
The cost of Spanish 10-year debt fell from more than 7.5% to 4.04%; Italy from 6.7% to 3.76%: Greece from 30% to about 10%; Portugal from 12% to 6.4%. The Spanish and Italian stock markets recorded a 1 year gain of 31% and 24% respectively. The French and German stock markets rose by over 24%. In contrast, Euro-Zone gross domestic product (“GDP”) fell 0.1% during Q3 2012, 0.6% during Q4 and 0.3% during Q1 2013, with sharper falls in the weaker economies.
Σχετικές Αναρτήσεις
- Wright, T., (2013), “The Periphery Six”, Project Syndicate, 14 Οκτωβρίου.
- Schadler, S., (2013), “The IMF and the legacy of the euro crisis”, VoxEU, 15 Οκτωβρίου.
- Buti, M. and Padoan, P.C., (2013), “How to make Europe’s incipient recovery durable – A rejoinder”,VoxEU, 08 Οκτωβρίου.