The world is probably going to change after the recent downgrading by Standard&Poor’s of the US debt rating from triple A to AA+. Beyond the disturbing loss of the landmark Treasuries represented for global finance, what is important here is the awareness that even the biggest world economy is not allowed anymore to do just anything with public spending. The message is clear. The current crisis is actually giving the opportunity to put the political genie back in the bottle. It is now time to grasp this chance, but will political decision makers have the will to do it?
This is the amount of increase of the French public debt from 2008 to 2009. It represents 10 GDP points. While making a lot of noise about the 22 billion…
The Debt Clock will tour around the whole country, stopping off at national landmarks and key cities to raise awareness of the national debt amongst the taxpayers who will have…
The Fitch rating agency on Tuesday downgraded Greece’s long-term debt ratings as well as those on four of the country’s largest banks, describing prospects for Greek public finances as negative. Greece is now exposed to the risk of losing the small amount of credibility it still has in front of its creditors. The concerns are growing about its ability to pay its huge public debt, estimated to 110% of GDP and budget deficit above 12.7% of GDP. A look at the evolution of the external debt of Greece is illustrating the concern of credit rating agencies and international financial markets:
Public Spending and Growth by Patrick Minford and Jiang Wang
L’endettement de l’Etat: stratégie de croissance ou myopie insouciante ? – Pierre Garello, Vesselina Spassova (french and english versions available)