Saturday, February 6, 2010
Is Debt Trashing the Euro
The article discusses how debt occurring especially in Greece could be bringing down the price of the Euro in all countries. This was brought on in Greece due to the fact that Greece was riding the strength of the Euro as well as lending money at extremely low rates causing huge debt. Now the problem facing the EU is whether or not they will have the ability to say no to Greece which will allow them to declare bankruptcy.
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I also read this article and it also talks about how there is going to be a strike starting on Wednesday because they plan on cutting public wages and pension payments to help cover the debt because they account for 51% of the budget.
This is the problem with the Euro, there are so many countries with different economic goals, as well as being at different points on their business cycles. It is a hard task to be able to have the appropriate Interest Rates for all the countries. This doesnt mean the EU wont work just that it is hard because some countries are very well developed while others are lagging behind.
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