Euro at risk of financial meltdown

as market chaos spreads

Eurozone, which is at risk of financial meltdown

The Telegraph reports that the Eurozone bloc is exposed to surging inflation and higher rates, according to analysts. The financial meltdown could be on the same scale as the crisis it suffered a decade ago amid surging inflation and aggressive interest rate rises worldwide, City investors have warned.

The newspaper reports that bond experts predict that the European Central Bank could have no choice but to follow the Bank of England and step in to prevent financial meltdown as strains within the Eurozone bloc’s financial system threaten to hit debt crisis levels within weeks.

Analysts say the eurozone is at risk from the same chaos that struck UK markets this last week, temporarily sending the pound to a record low and sparking a surge in borrowing costs as swathes of mortgages were pulled by lenders. Investors fear the eurozone could be next amid early signs of building trouble. Stresses within the region’s financial system have already reached levels last seen a decade ago during the eurozone debt crisis and could soon reach the 2011 peak as traders closely monitor the region.

An ECB indicator of stress within the eurozone’s financial system – which looks at strains in bond, stock and money markets – has jumped from below 0.1 at the start of the year to almost 0.5 currently, according to Saxo Bank. In the eurozone debt crisis, the index exceeded 0.6. A financial meltdown could be imminent.

Experts believe there are two possible triggers in the eurozone for a financial meltdown: extra spending to pay for household support and action by the European Central Bank to tame inflation.

Full story here

COVID-19 in Madeira: updates can be found in an earlier post

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5 thoughts on “Euro at risk of financial meltdown”

  1. It seems to me that it’s important to look at the source here.

    It’s the EU-loving (Not!) Daily Telegraph.

    I’d wait for the FT to say this kind of thing before believing it.

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  2. Ken, when a Tory PM boasts she is going to enable me to see a GP within two weeks and advocates more immigration whilst not letting “refugees” already here not work. I believe it.

    Reply

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