Is the Eurozone heading towards a new sovereign debt crisis? - Economics Observatory

Is the Eurozone heading towards a new sovereign debt crisis? - Economics Observatory

Source: Economics Observatory

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DW NOTE

The Eurozone's sovereign debt question isn't whether a crisis is coming — it's whether the ECB can hold the periphery spreads once oil at $111 forces headline inflation back above 3% and kills the terminal rate cuts markets were pricing six months ago. When energy is rationed by price and Italian ten-year spreads are 140bp over Bunds, the room for fiscal support disappears precisely when it's needed most.

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