The coronavirus will cause a “dizzying” economic crisis that will widen the differences between the North and the South of the Union, warns Bruno Le Maire, the Minister of Economy and Finance. If the 27 fail to pool the debt to finance reconstruction spending, the Union and the euro area will be doomed to disappear.
On April 28, the rating agency Fitch, downgraded the rating of Italian public debt from BBB + to BBB- from 135.2% of GDP to 155.7% due to the coronavirus crisis. It’s just one step away from the rotten investment category (junk bonds). Is this the announcement of a new debt crisis in the euro area?
No. Interest rate spreads (“Spread”) between the big European states remain reduced thanks to the action of the European Central Bank (ECB) which knew how to provide a strong response: on March 19, it announced that it would buy back at least one trillion euros in obl
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Jean Quatremer correspondent in Brussels (EU)