Europe’s debt wish places huge burden on central bank | Bangkok Post: business

Business > News

Europe’s debt wish places huge burden on central bank

  • Published: | Viewed: 1,324 | Comments: 0
  • Newspaper section: Business
  • Writer: Kenneth Rogoff
- +

Euro-zone leaders continue to debate how best to reinvigorate economic growth, with French and Italian leaders now arguing that the euro zone’s rigid “fiscal compact” should be loosened. Meanwhile, the leaders of northern member countries continue to push for more serious structural reform. 

Ideally, both sides will get their way, but it is difficult to see an endgame that does not involve significant debt restructuring or rescheduling. The inability of Europe’s politicians to contemplate this scenario is placing a huge burden on the European Central Bank (ECB).

Although there are many explanations for the euro zone’s lagging recovery, it is clear that the overhang of both public and private debt looms large. The gross debts of households and financial institutions are higher today as a share of national income than they were before the financial crisis.

This article is older than 60 days, which we reserve for our premium members only.You can subscribe to our premium member subscription, here.

0 people commented about the above

Readers are urged not to submit comments that may cause legal dispute including slanderous, vulgar or violent language, incorrectly spelt names, discuss moderation action, quotes with no source or anything deemed critical of the monarchy. More information in our terms of use.

Please use our forum for more candid, lengthy, conversational and open discussion between one another.

  • Latest
  • Oldest
  • Most replied to
  • Most liked
  • Most disliked

    Click here to view more comments