Uncertainty in Southern Europe continues to plague other euro-zone economies, despite the ECB’s pledge to buy an unlimited quantity of struggling countries’ government bonds. According to the European Commission, consumer confidence hit a 40-month low in September and most experts expect the euro-zone recession to worsen this year. The French PMI fell 4 points this month, marking one of the largest slides in recent history.
In Greece, the country is facing yet another budget shortfall. A report, to be released in October, will produce an estimate of this most recent Greek deficit. At that time, the ECB, IMF, and the euro-zone governments will have to determine how they will proceed with the Greek bailout plan and who will be forced to alleviate some of the Greek debt. Without greater concessions, Greece could go bankrupt as early as November and send the euro-zone into another possible crisis.
In Spain, the government is in talks with the ECB over a potential bailout and any conditions that would come along with said bailout. Additionally, the Spanish economy received a much-needed boost this past Thursday when it sold a significant amount of long-dated debt to foreign investors. This move has given Spain greater fiscal freedom to tackle some of its recent financial problems.
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Brandon Nesfield
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