Germany has already warned Italy two weeks ago that they continue to pursue their tough yet suitable economic solution to the crisis or else they can fall into debt due to the Euro Zone crisis. A bailout for Spanish banks failed to calm markets. Today, the Spanish bonds have yielded as their borrowing costs continue to rise.
Italy is a country with a huge debt. It has 1.9 trillion euro as public debt while its GDP is around 120%. This particular ratio is similar to that of Greece. Germany hopes that all political endeavor be focused on Italian Prime Minister Mario Monti’s efforts as this seems to be the light of hope to allow Italy to escape the grasp of the Euro zone crisis unscathed.
Spain’s bonds continue to grow less and less in value. Many experts claim that this is because of lacking proper debt metrics and proper banking systems. Their borrowing costs continue to plunge them into debt.
Recently, Greeks have elected the New Democracy, a pro-bailout political party. The victory of the New Democracy against anti-bailout parties SYRIZA and PASOK spelled victory for Europe. However, the crisis is still ongoing. But one of the worst had been averted; Greece’s exit from the Euro would spell danger to almost every economy in the European sector.
The G-20 summit meeting scheduled recently is to focus on these particular world events and proposals are welcomed from every nation to avert the crisis and avoid the economic destruction which the volatile euro zone crisis continue to inflict.
Source: Indiatimes.com