The euro area is clearly difficult to avoid the spread of the crisis


Posted October 27, 2020 by evidentcaps

At the same time, the international rescue plan in Ireland is also the final stages of revision
 
The euro area is clearly difficult to avoid the spread of the crisis, if not all respond in advance to make the program, both for countries around the world or , when will be a bit confused.

Like Greece, like when this crisis began, initially still want through their own efforts to defuse the crisis, but "Rome was not built in a day", the Greek debt crisis was ultimately resolved to resort to force to the domestic crisis. Ireland seems to be present down this road. Although Ireland is still self-rescue efforts, however, the ultimate self-rescue plan triggered a public outcry. According to the BBC, local time, 27, held in Dublin, Ireland, tens of thousands of people demonstrated against the government's austerity budget.

At the same time, the international rescue plan in Ireland is also the final stages of revision. In related news that, according to the plan, the Irish can get 850 billion euros loan to tide over the difficulties.

Unfortunately, even though the program ultimately adopted, such as Greece, Ireland, to the pressure of cross as a temporary crisis, but the resulting panic caused by the spread of already can not stop the loan itself. Concerns about the global market has not only its neighboring countries - Portugal and Spain the possibility of sovereign debt risk, but perhaps the outbreak is expected later in Ireland. Economic guru Stephen Roach recently reminded, Ireland for assistance, the European sovereign debt should be prepared to face more crisis. In his view, the crisis could spread to southern Europe, the development of a series of things that hot filling bottle caps are predictable, first Greece, then Ireland, then attention turned to the people of Portugal and Spain.

Data also show that Portugal and Spain last week, sovereign bond credit default swaps (CDS) hit record highs. This means that the two countries, increasing the risk of defaulting on its debt.

In addition, there are indications that the euro area can hardly be optimistic in the short term, or even Italy and Austria have also taken place against government austerity budget, cuts in public spending protest.

If people are still talking about the beginning of the second bottom global economy that is still possible long-term low levels the U.S. economy if the crisis is now likely to drag into the euro zone the process of global economic recovery.

Is now Greece, Ireland's debt crisis is still "point", has not yet extended to the "plane", the euro area had prepared in response to the debt crisis can support hundreds of billions of euro loan for some time. But the outbreak of the crisis are often overnight, therefore, for countries around the world including , well in advance is not the worst ever.

First, the crisis will lead to the euro zone selection and the United States, Japan and the same monetary easing measures, which means that due to the liquidity crisis from flooding again, hot money will continue to accelerate into the emerging market countries and countries with good prospects for economic recovery. For , currently in control of the key problems of liquidity, when, and how to find a more effective flow of the road diversion will be considered for some time one of the key monetary authorities.

Second, the crisis could trigger a sharp depreciation of the euro. Last week, the rapid decline in the euro against the dollar increase, the euro against the U.S. dollar hit a nearly 2-month low. Therefore, the crisis in the international monetary system of the future impact is difficult to estimate, on the national currency will depreciate a significant impact on the dollar stabilize or even short-term trends in currency hedging choice again, would most likely have. RMB appreciation against the euro may quickly, but the dollar over the same period is likely to remain relatively stable or even weak does not rule out the possibility of devaluation.

Third, the EU is 's largest foreign trade partner, the crisis may be affected in the longer period of time to import and export data, within the euro area countries are more likely to lead to some trade protection appears. Therefore, an appropriate adjustment of 's export structure is also in the coming period should be taken into account.

"Sick as a mountain down, disease go away on foot," the U.S. and Japanese quantitative easing policy has not yet dispersed the liquidity impact of the euro zone and the debt crisis to the economic situation is the complexity of the problems in the short term and the country's economic situation introduction of the policy, should do more preparatory work is based on maintaining the status quo may be a realistic choice.

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Issued By evidentcaps
Country China
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Last Updated October 27, 2020