Tags

Related Posts

Share This

Europe Debt Crisis Bringing Down Germany

A “disastrous” German bond sale on Wednesday sparked fears that Europe’s debt crisis was starting to threaten even Berlin, with the leaders of the euro zone’s two biggest economies still at odds over a longer-term structural solution.

With contagion spreading, a majority of twenty prominent economists polled by Reuters predicted that the euro zone was unlikely to survive the crisis in its current form, with some envisaging a “core” group that would exclude Greece.

Investors were also unnerved by reports that Belgium is leaning on France to pay more into emergency support for failed lender Dexia under a 90-billion-euro ($120-billion) rescue deal that had appeared done and dusted.

A special report by Fitch Ratings suggested France had limited room left to absorb shocks to its finances, such as a new downturn in growth or support for banks, without endangering its triple-A credit status.

“The debt crisis is burrowing ever deeper, like a worm, and is now reaching Germany,” one of the more eurosceptic backbenchers in Angela Merkel’s center-right government, Frank Schaeffler of the junior coalition partner Free Democrats (FDP), told Reuters.

via Disastrous bond sale shakes confidence in Germany | Reuters.

Be Sociable, Share!