- With economies everywhere in a self-induced coma and rescue bazookas getting ever bigger, the effect on public finances is going to be epic.
- This is going to be difficult anywhere and require debt monetization on a large scale, with uncertain consequences.
- But some of the worst-hit countries like Italy, as members of a currency union, are not masters of their own monetary affairs, greatly complicating the way forward.
- A moment of truth is approaching where either some form of debt mutualization is introduced or the ECB is allowed to backstop insolvent countries.
- The alternative is a break-up of the eurozone. Before the year is over, the Germans will have to make a choice.
Moment Of Truth For The Eurozone Is Approaching
April 14th, 2020 · No Comments