European Debt Crisis: Is This the Beginning of the End?
by David Moenning
Thursday, 20 October 2011
Almost exactly two years since the onset of the Greek debt crisis, the European Commission has set out to create a comprehensive strategy to rein in the crisis and return to a viable path of economic prosperity. The deadline: Sunday, October 23.
With fiscal instability and credit contagion continuing to rock markets internationally, the world’s leading economies emphasized the need for immediate action at the recent G20 meeting. The group of finance ministers and central bankers pressured Europe on Saturday to “decisively address the current challenges,” and complete a plan before this weekend to resolve the sovereign debt crisis.
Japanese Finance Minster Jun Azumi asserted that: “Europe needs to get its act together because unless the crisis is put to an end, it will start to affect emerging economies which have enjoyed strong growth.”
The ambitious deadlines for the new comprehensive plan presentations fall on October 23 for the EU summit this weekend, and again on November 3 for the G-20 ministers.
The proposal, still in the development phase, outlines areas of action “designed to break the vicious circle between doubts over the sustainability of sovereign debt, the stability of the banking system and the European Union’s growth prospects,” the EU commission explained.
The plan will “chart Europe’s way out of the economic crisis,” Commission President Jose Manuel Barroso said.
The so-called “comprehensive plan” involves three areas: Dealing with the Greece bailout, recapitalizing the banks (so that they can withstand future problems), and eliminating the current credit contagion that is beginning to infect more and more countries in Europe.