A titanic problem
Europe’s banks and investors are waiting nervously for the results of the latest stress tests to be published at 17:00 BST today. This state of anxiety hasn’t been helped by events in Italy, the eurozone’s third largest economy, which rapidly lost market confidence under the same pressures faced by Portugal, Ireland and Spain this week.
Five to ten banks are expected to be required to raise more capital, half of those are thought to be in Greece. With politicians across Europe nervous, Italian finance minister Giulio Tremonti won best quote yesterday when he compared the eurozone to the Titanic: “not even the first class passengers will be saved,” he remarked.
Martin Wolf sees the debt crises on both sides of the Atlantic as a legacy of the west’s private and public sector debt binges. He concludes these are dangerous times. The US may be about to make one of the biggest and least necessary financial mistakes of all time. The eurozone could be on the verge of a fiscal cum financial collapse that derails the wider European project.
Global economy speaker Martin Wolf is an award-winning journalist, considered to be one of the world’s most influential writers on economics.
Dr. Razeen Sally, senior lecturer in international economic policy at the LSE, summed up the eurozone’s outlook back in March for Chartwell: “it’s not very good“.