European Debt Crisis Will Not Come Again
- By Himfr Mary
- Published January 31st, 2012
- Business
- Unrated
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U.S. investment bank Bear Stearns in March 2008 all of a sudden collapse, setting off a prelude to European and American financial crisis, Lehman Brothers in late 2008 caused the outbreak of the storm sweeping the globe, are bearing most of continental Europe, the United Kingdom, continental Europe, and even as far away as northern Europe small island country of Iceland, is also being implicated as a domino-like one by one.
Expansion of the U.S. financial industry over the blind, multi-mortgage securities packaged by the spread of global securities as collateral, when the real estate bubble burst after out of control. Although the European financial system has long been relatively conservative, but after years of economic prosperity, the real estate prices soared, has boarded the Xianfeng, once the economic downturn into recession, mortgage rates followed the sharp rise in bad debts, the last non- to avoid over-generous lending policies affect banks and financial institutions.
British banks to be taken over or rescue, party to ride out the storm, which also benefited from the United Kingdom is not a member of the EU monetary authorities can independently take emergency measures to be promptly cleared of a crisis. The Government of Iceland's major banks due to bear huge losses, so that the edge of bankruptcy several depression and, finally, because of its small economy, foreign creditors easier to deal with tolerance and to assist them to restructure its debt.
Earlier this year, "European pig Five" first to be found caught in the debt crisis, the Greek government is facing can not pay the national debt is about to expire one after another. But at that time whether other EU member states to impose a helping hand to the differences of opinion between Germany and France is openly accusing each other, making the financial market volatility in the euro sell-off continued. If not put out rotor, spark enough to start a prairie fire, the EU may eventually be forced into dissolution.
For the overall situation, the EU finally reached a consensus, through the establishment of 750 billion euros Stabilization Fund (EFSF), to support the allies in need of assistance, on condition that recipient countries need to implement fiscal austerity. Greek government which has been the European Union and International Monetary Fund (IMF), providing 110 billion euros rescue package to support, a party to the European sovereign debt crisis temporarily relieve.
Two recent Bank of Ireland, the phenomenon of financial instability has
emerged in order to avoid a run bank crisis, the government was forced to intervene. Ireland, the EU is very concerned about the incident, repeated its offer to accept the EU and IMF assistance. After some struggle, the Irish government had to bow to reality, willing to accept the financial support of the two organizations. Amount of assistance is expected to reach 85 billion euros, slightly lower than the amount of Greek, in addition to 200 billion will be injected into the banking system, the balance should provide the budget over the next 3 years and emergency needs.
Financial aid is not a free lunch, the prerequisite is the need to implement deficit reduction plan to reduce the deficit and balance the country's vast public finances. Irish finance minister has just announced an austerity plan 4 years to save 15 billion euros, while the future debt-GDP ratio of 100% want to control the level, but the budget subject to approval by Congress to take effect.
The so-called one after another, attempting not out here, and Western Europe, Portugal and Spain, the situation between the two countries once again arouses fear, is considered most likely become the third country to accept the rescue of Portugal, National by dissatisfaction with the government's fiscal austerity, is launching a large-scale strike in protest.
The recent international financial market tensions in Europe when fluctuations, particularly into the euro against the dollar continued to weaken after November, "pig of the five countries in Europe," the weaker bond prices, pushing up bond yields. Irish national sovereign ratings Diezao reduce the multi-national credit default swaps (CDS) prices to new high, risk index has been rising.
While the economic situation has not yet large-scale deterioration of Spain, but in fact there are worries, there is still depreciation of the domestic threat to property values, will enable banks in bad debts increased, the government or repeat the mistakes of its neighbors and the possibility of falling into the debt crisis.
If the debt crisis of the market worries spread to Portugal and West China, the EU's 440 billion euros into the fund will be difficult to cope. In this regard, IMF said there had been a mechanism to provide financial assistance to countries in need, and the IMF also promised further funds if necessary to increase capital injection.
A new round of European debt crisis, although troubled by financial and investment markets, but is expected to have the experience to solve critical problems earlier Greece, Ireland and Portugal should also be near misses, and Spain's financial strength is not bad, get into debt crises less likely, so the euro area financial turmoil once again the chance is low.
Expansion of the U.S. financial industry over the blind, multi-mortgage securities packaged by the spread of global securities as collateral, when the real estate bubble burst after out of control. Although the European financial system has long been relatively conservative, but after years of economic prosperity, the real estate prices soared, has boarded the Xianfeng, once the economic downturn into recession, mortgage rates followed the sharp rise in bad debts, the last non- to avoid over-generous lending policies affect banks and financial institutions.
British banks to be taken over or rescue, party to ride out the storm, which also benefited from the United Kingdom is not a member of the EU monetary authorities can independently take emergency measures to be promptly cleared of a crisis. The Government of Iceland's major banks due to bear huge losses, so that the edge of bankruptcy several depression and, finally, because of its small economy, foreign creditors easier to deal with tolerance and to assist them to restructure its debt.
Earlier this year, "European pig Five" first to be found caught in the debt crisis, the Greek government is facing can not pay the national debt is about to expire one after another. But at that time whether other EU member states to impose a helping hand to the differences of opinion between Germany and France is openly accusing each other, making the financial market volatility in the euro sell-off continued. If not put out rotor, spark enough to start a prairie fire, the EU may eventually be forced into dissolution.
For the overall situation, the EU finally reached a consensus, through the establishment of 750 billion euros Stabilization Fund (EFSF), to support the allies in need of assistance, on condition that recipient countries need to implement fiscal austerity. Greek government which has been the European Union and International Monetary Fund (IMF), providing 110 billion euros rescue package to support, a party to the European sovereign debt crisis temporarily relieve.
Two recent Bank of Ireland, the phenomenon of financial instability has
Financial aid is not a free lunch, the prerequisite is the need to implement deficit reduction plan to reduce the deficit and balance the country's vast public finances. Irish finance minister has just announced an austerity plan 4 years to save 15 billion euros, while the future debt-GDP ratio of 100% want to control the level, but the budget subject to approval by Congress to take effect.
The so-called one after another, attempting not out here, and Western Europe, Portugal and Spain, the situation between the two countries once again arouses fear, is considered most likely become the third country to accept the rescue of Portugal, National by dissatisfaction with the government's fiscal austerity, is launching a large-scale strike in protest.
The recent international financial market tensions in Europe when fluctuations, particularly into the euro against the dollar continued to weaken after November, "pig of the five countries in Europe," the weaker bond prices, pushing up bond yields. Irish national sovereign ratings Diezao reduce the multi-national credit default swaps (CDS) prices to new high, risk index has been rising.
While the economic situation has not yet large-scale deterioration of Spain, but in fact there are worries, there is still depreciation of the domestic threat to property values, will enable banks in bad debts increased, the government or repeat the mistakes of its neighbors and the possibility of falling into the debt crisis.
If the debt crisis of the market worries spread to Portugal and West China, the EU's 440 billion euros into the fund will be difficult to cope. In this regard, IMF said there had been a mechanism to provide financial assistance to countries in need, and the IMF also promised further funds if necessary to increase capital injection.
A new round of European debt crisis, although troubled by financial and investment markets, but is expected to have the experience to solve critical problems earlier Greece, Ireland and Portugal should also be near misses, and Spain's financial strength is not bad, get into debt crises less likely, so the euro area financial turmoil once again the chance is low.
Written by Himfr Mary
I am a professional editor from China Suppliers, and my work is to promote a free online trade platform. http://www.frbiz.com/ contain a great deal of information about refinishing kitchen cabinets,sunless tanning spray,tie down ratchet, welcome to visit!
