Poll: Do You Believe That the European Sovereign Debt Crisis Is Over?
It has been almost five years to the day since Greece first disclosed that its actual budget deficit was 12.7% of GDP and not 7.3%, as previously reported. The announcement sent shock waves through the markets. In the subsequent two years, government-bond prices in the European peripheral countries (Greece, Ireland, Spain, Portugal, and Italy) cratered and interest rates soared.
The crisis reached a crescendo in 2012 but has since been mollified by a host of new programs to backstop government bonds, which have restored interest rates to much more sanguine levels. Nevertheless, the Eurozone has experienced anemic growth and the debt profiles of these countries have worsened.
Now, political parties that are against the Eurozone in such places as Spain and Italy are gaining traction, threatening to blow the union apart.
Amid this contrast of relative calm in the markets on the one hand and larger debt profiles, weakening economic growth, and rising political instability on the other, we asked CFA Institute Financial NewsBrief readers to comment on whether they thought the European sovereign-debt crisis is over. Of the 811 respondents, 75% responded that the crisis is not over, whereas approximately 19% responded that the crisis is either over or largely over.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.