Euro debt crisis

Euro  debt crisis

The eurozone debt crisis deepened as Germany, France and 13 other members of the single currency faced  having their credit ratings downgraded. In a move that will pile pressure on eurozone leaders and is likely to hit markets, it emerged that ratings agency Standard & Poor’s had put all but two euro nations on credit watch. The bombshell came as eurozone leaders frantically tried to prevent the break-up of the single currency and restore stability after weeks of mounting crisis. After emergency talks ,French President Nicolas Sarkozy and German Chancellor Angela Merkel renewed calls for EU Treaty change to solve the single currency crisis. 

Cause of Euro debt crises

The European sovereign debt crisis has been created by a combination of complex factors such as:

• The globalization of finance,

• Easy credit conditions,

• International trade imbalances,

• Real-estate bubbles that have since burst,

• Slow growth economic conditions 2008 and after;

• Fiscal policy choices related to government revenues and expenses,

• And approaches used by nations to bailout troubled banking industries and private bondholders, assuming private debt burdens or socializing losses.