Sovereign Credit Risk in the Eurozone

What is the current state of sovereign credit risk across the Eurozone? Does the recent fiscal crisis extend to other (non-Eurozone) countries? Is Greece the centre of the problem? How did the current fiscal crisis in the Euro area start? Who is behind it? How can it evolve? How can it be addressed?...

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Bibliographic Details
Published in:	World economics (Henley-on-Thames, England) Vol. 13; no. 1; p. 123
Main Author:	Haidar, Jamal Ibrahim
Format:	Journal Article
Language:	English
Published:	Henley-on-Thames NTC Publications Ltd 01-01-2012
Subjects:	Bailouts Credit risk Eurozone Fiscal policy Sovereign debt Europe
Online Access:	Get full text
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Summary:	What is the current state of sovereign credit risk across the Eurozone? Does the recent fiscal crisis extend to other (non-Eurozone) countries? Is Greece the centre of the problem? How did the current fiscal crisis in the Euro area start? Who is behind it? How can it evolve? How can it be addressed? And, is a fiscally challenged country likely to want to leave the Eurozone? This article addresses these questions, argues that a fiscally weak country is better off in the Eurozone than outside it, and finds that a feasible policy tool can be a bailout associated with tough fiscal conditionality. It also shows that sovereign credit risk adjustment in the Eurozone can happen, using various measures, but not without 'fiscal pain'. [PUBLICATION ABSTRACT]
ISSN:	1468-1838 1474-3884