№279. Can Italy and Spain survive rates of 6-7%?
№279. Can Italy and Spain survive rates of 6-7%?
Author(s): Daniel Gros
Subject(s): Economic policy, Government/Political systems, Comparative politics, Financial Markets
Published by: CEPS Centre for European Policy Studies
Keywords: Italy; Spain; European Central Bank; Fiscal problems; Government;
Summary/Abstract: The sentiment that the euro is now in real danger is based in large part on the wide spread conviction that interest rates of 6-7% are simply unsustainable for both Italy and Spain. However, a closer look at the fundamentals suggests that both countries should be able to live with this level of interest rate for quite some time,but only if they mobilize domestic savings, which remain strong in both countries. For Spain, in addition, some debt/equity swaps are needed.
Series: CEPS Policy Briefs
- Page Count: 4
- Publication Year: 2012
- Language: English
- Content File-PDF