The Spread of Debt Crisis

The Spread of the European Sovereign Debt Crisis By Lia Menéndez April 2012 In this section of the E-book, we look at how the debt crisis that began in Greece in 2010 stagger to other countries in the Eurozone. Investors questioned Greeces ability to remuneration its debts and in brief doubted other countries abilities to redress their debts. Investors believed that these countries shared similar monetary features with Greece, particularly elevated deficits and debts. Part A first discusses how a autonomous debt crisis begins. It considers how high debt and low economic growth can make up a financial crisis when a country cannot afford to pay its debt, as was the case with Greece. It also describes the loss of investor confidence that a plagiarizes when investors worry taking losses because a country lacks the funds to pay its debt. Part B explains how the sovereign debt crisis that began in Greece migrated to other countries in the Eurozone as investors also lost confidence in these countries. Economists stand for that the European sovereign debt crisis has multiple, inter-related causes. Although investors believed that some countries in the Eurozone (e.g., Greece) posed risks of financial loss, other bear upon countries (e.g., Ireland, Portugal, Spain, and Italy) were financially healthy by comparison. Nonetheless, the crisis has affected these economies as well.



Housing-market and banking crises greatly impacted Ireland and Spain causing government deficits to rise when their governments intervened to rescue their banking sectors that were heavily invested in failing housing-markets. In Portugal and Italy, high public debts adversely affected each countrys financial health and ability to pay investors. Part C concludes by describing the impact the financial crisis might have on other countries in the Eurozone, especially France, if investors lose confidence and diaphragm investing in

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them. It summarizes investors concern that the financial crisis is far from over and bequeath continue to spread...If you want to get a full essay, regulate it on our website: Orderessay



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