The EU is threatened with the next debt crisis – thanks to the eternal problem children
The ECB’s low interest rate policy should give highly indebted countries like France, Italy and Spain time to lower their schools. But that didn’t happen: In the past ten years, debts have risen sharply there, of all places. Now the European Union is threatened with another national debt and euro crisis.
French President Emmanuel Macron and Italian Prime Minister Mario Draghi.APA
In the entire EU, the national debt ratio is currently 87.1 percent. This is only marginally higher than ten years ago when it was 86.7 percent. However, the massive differences between the individual states give cause for concern. At the same time, debts in already heavily indebted countries such as Greece, Italy, France and Spain have skyrocketed. And this in a long phase of the low or zero interest rate policy of the European Central Bank (ECB), which should actually give them time to reduce debt.
Ireland shows how it can be done better – the country was able to drastically reduce its debt. Germany and Denmark have also behaved in an exemplary manner. Debt has also fallen slightly in Austria.
Public debt in the EU.
Indebted countries have to put their budgets in order
Due to the rising interest rates for the government bonds of highly indebted southern European countries, the fear of a renewed euro crisis is now growing. “It is not the task of the ECB to cap interest rates for the debtor countries,” explained Kucsera. And further: “It is the task of the indebted countries to finally put their budgets in order structurally”.