The fiscal crises in Greece, Ireland and Portugal could yet spread to other parts of the euro zone and parts of eastern Europe, the International Monetary Fund said today in its twice yearly report.
"Strong policy responses have successfully contained the sovereign debt and financial sector troubles in the euro area periphery so far, but contagion to the core euro area, and then onward to emerging Europe, remains a tangible downside risk," the IMF said.
"Negative feedback loops between concerns about the stability of government and bank balance sheets are proving difficult to break," the fund said. "And concerns about ... financial-sector balance sheets extend beyond the euro area periphery."
The IMF said bonds maturing in 2011 will be the equivalent of 10% of the combined economic output of Greece, Portugal and Spain, while Belgium, Ireland, and the U.K. will also have significantly higher "rollover needs."
Yeah... EU is on shaky grounds. I'm reporting from Estonia, which is actually doing just fine. We would be even better, if some of the southern countries would handle their problems on their own.
ReplyDeleteEstonia's GDP grew by 8% in the first quarter of 2011. And we had a 3.6% current account surplus in 2010. We also had a budget surplus of 0.1% last year, making us the only country in EU to have a surplus (we have the lowest national debt and budget gaps in EU for some time now).
So if any of you are looking for a great place to be... Estonia could be it. :-)
Cheers ya'll!