It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Thank you.
Some features of ATS will be disabled while you continue to use an ad-blocker.
(visit the link for the full news article)
The European debt crisis could spread across the continent in a major blow to the single currency, leading economists warned last night.
Turmoil in Greece, Ireland and Portugal may engulf the wider eurozone despite the billions of pounds already spent in emergency aid, according to the International Monetary Fund.
It urged European leaders to fix the banking system and slash national deficits to restore confidence to the region.
In its latest report on Europe, it said economically weak countries could still drag their stronger neighbours down.
Read more: www.dailymail.co.uk...
The report said: ‘Strong policy responses have successfully contained the sovereign debt and financial-sector troubles in the euro area periphery so far. But contagion to the core euro area and then onward to emerging Europe remains a tangible risk.’
Plea: Antonio Borges from the IMF said shaky banks need to strengthen
European finance ministers are set to approve a £68billion rescue plan for Portugal on Monday, including around £4billion from Britain. This follows the £96billion bailout of Greece and the £75billion bailout of Ireland last year.
But fears are mounting that Greece still cannot afford to pay back its debt of £285billion and may require more support to prevent default.
Jose Manuel Gonzalez-Paramo, of the European Central Bank, said: ‘A default would have extreme adverse consequences, many of an irreversible nature, for the Greek economy.’
The IMF warned ‘a shock to confidence could spread quickly throughout Europe’.
European director Antonio Borges promised to provide more aid to Greece if necessary, adding: ‘So far they have not approached us. The IMF stands ready.’
Read more: www.dailymail.co.uk...
Jose Manuel Gonzalez-Paramo, of the European Central Bank, said: ‘A default would have extreme adverse consequences, many of an irreversible nature, for the Greek economy.’
The IMF warned ‘a shock to confidence could spread quickly throughout Europe’.
Read more: www.dailymail.co.uk...
)
For starters, take the record 2.9m homeowners who had their properties repossessed by banks last year
The economy of the 17 countries that use the euro grew by 0.8% in the first three months of 2011, up from 0.3% in the previous quarter.
Germany was largely responsible for the better-than-expected figure, reporting growth of 1.5% in the period.
There was a surprisingly strong 0.8% growth rate from debt-laden Greece.
France grew 1%, Italy and Spain grew 0.1% and 0.3% respectively and Portugal slid into recession after contracting for the second quarter in a row.
Growth there declined by 0.7%, following a 0.6% contraction in the final quarter of 2010.
"This is almost certainly as good as it gets for the eurozone and growth seems likely to moderate over the coming months in face of significant headwinds," said Howard Archer at IHS Global Insight.
Originally posted by spacedonk
reply to post by alfa1
A lot of the debt it is held in bonds. Owned by a variety of people, institutions, hedge funds, IMF other governments etc etc. Governments borrow money for a period of time at a fixed rate of interest, in a lot of cases this is how civic building projects like roads etc are funded, not paid for up front but staggered over ten years through government debt.
Originally posted by alfa1
ok, I have what maybe a rather simplistic question.
If every country is in debt, then who has all the money?
Does everyone owe money to everyone? Is that even possible?
Unfortunately, in practice it matters very much indeed. This is because of the recklessly expensive error made by the outgoing chancellor Alistair Darling around this time last year. Darling’s disaster came on Monday May 10, 2010, when a meeting of European leaders took the momentous decision to launch a 750 billion euro fund, paid for by all European taxpayers, to rescue eurozone countries who met with financial difficulties. In an action that was entirely characteristic of New Labour’s free and easy way with British taxpayers’ money when it came to the European Union, Darling committed Britain to the bail-out. It was to be his final act as Chancellor. The following day, David Cameron and Nick Clegg reached their historic agreement, and the Coalition was formed.
The Irish bail-out has so far cost Britain some £7 billion (more, in fact, as we also loaned them money on a bilateral basis) while Portugal has cost a further £4.2 billion, though the final sum has yet to be agreed. It is highly unlikely that the British taxpayer will ever again see more than a small fraction of the money we have committed to these two bankrupt countries.
The reason why the EU is set on this frankly lunatic course is terrifying. The sad truth is that most European banks, including the ECB, are now technically bankrupt. The only way they can stay afloat is by lying about the state of their accounts. So long as Greece, Portugal and Ireland are theoretically solvent, their debt can be marked at par on the banks’ balance sheets. The moment that they acknowledge reality by rescheduling their debt (going bankrupt, in ordinary discourse), the ECB and the rest will be forced into large write‑offs and provisions. The situation is so serious that one executive board member of the ECB, Jürgen Stark, has warned that Greek debt restructuring could cause a financial disaster that would put the devastation that followed the collapse of Lehman Brothers in 2008 “in the shade”. This is the hideous background to the meeting of European finance ministers that takes place on Monday and Tuesday in Brussels. As with Portugal and Ireland, Britain will once again be asked to throw good money after bad in order to maintain the blatant fiction that the Greek state – and the rest of the eurozone – is financially sound. This will give George Osborne an opportunity to remedy Alistair Darling’s mistake of 12 months ago. I understand that he will take it. The Chancellor will argue next week that Britain played no role in the first Greek bail-out, and so the rescue mechanism to which his predecessor mistakenly subscribed does not apply. This is only sensible. Osborne’s fundamental duty is not to ingratiate himself with European leaders – it is to guard the national finances. That means refusing to commit a penny more of British taxpayers’ money to the costly and doomed fight to save the euro.