European Commission: High risk of financial collapse in 2010
Saturday, January 2, 2010
The European Commission (EC) within 8 years the new EU countries the high risk that the public finances will no longer affordable, and the country actually go bankrupt. These countries are Greece, Spain, Ireland, Slovenia, Slovakia, Malta, Cyprus and ... Netherlands.
The other EU countries of the EC receive the designation "medium risk" pinned. Only Finland is of "low risk" qualified.
Because the European Monetary Union will a bankruptcy of a Member State shall affect the EU as a whole. The European countries are financially, economically and politically now so closely linked that the countries that are more prosperous State that a financial collapse is to help to come. "After two years with a collapsing banking systems and economic recession, the Eurozone in 2010 with a huge debt crisis," writes the Wall Street Journal.
The country with the highest risk is Greece, that a deficit of 12.7% of GNP is four times higher than the established limit. The Greek government is trying to get to where the parliament to agree to significant cuts, which undoubtedly will be accompanied by even more tension in the already troubled streets of Greek cities. Although a large Greek bankruptcy will affect the reputation of the EU, Brussels has so far refused to Greece financial rescue.
Besides Greece, the international credit standing of already reduced Spain, Ireland and Portugal are warned that these countries can be. Even France, which the card is colored blue ( 'average risk') which, just as Great Britain, which is not in the euro zone, because of the rapidly deteriorating public finances risk a lower credit rating to get.
The public finances of the Euro countries have been hard hit because of the hundreds of billions of bailout costing European banks and financial institutions. The economic recession also increases the cost of social security, tax revenues will drop. Many economists fear that it will take many years before the damage is repaired. Also, investors are afraid of a "double dip" recession in the EU, and governments are wrong with their timing and the speed of their household in order to try to get books.
The direct effect of saving the banks will for us, the citizens in 2010 include significant cuts to unemployment benefits and other government programs, and also substantial tax increases. Back in January, Greece will bite the head with an expected radical tax reform plan, the rest of the EU will in 2 years then also have to believe. Conclusion: It is provisionally made with the ever growing prosperity of the last 20 years. Most would have to learn for a long time to achieve substantially the belt.
Original Source: Wall Street Journal
Source: xander news