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How exactly is this causing the problem? The problem is the cost of financing debt. That cost is high because the risk of the investment is (perceived) high.
by linuxhansl 15y ago
How exactly is this causing the problem?
The problem is the cost of financing debt. That cost is high because the risk of the investment is (perceived) high.
- tsotha 15y ago>That cost is high because the risk of the investment is (perceived) high. Eh, that's semantics. The risk is high. None of these countries can afford the slightest rise in interest rates, whether that rise is associated with a loss of confidence or because there are better places to put money. That's what the Maastricht treaty was supposed to prevent. But that was a pipe dream because there's no way for the union to keep the spendthrifts in line.