Crisis in Europe is a concern that never went away

After the European Central Bank pump billions into the economies of Europe, some analysts believed the worst of the crisis had passed. Belief, however is not reality.

As Robert Sanuelson notes in the Washington Post, the crisis never really went away, partly as a consequence of a confluence of ongoing issues.

“First, there’s a banking crisis. Banks have too little capital (a buffer against losses) and have a hard time raising funds. Next is the sovereign debt crisis. The high debts of many countries raise fears that, like Greece, they may default. And, finally, there’s an economic growth crisis. Low growth or slumps afflict most of the 17 countries using the euro,” says Samuelson.

This sentiment was reflected in remarks made by IMF Chief Christine Lagarde, who argued that while the US recovery may be taking hold, the situation in Europe is less stable and at risk for another recession.

The situation in the US, according to Federal Reserve Bank of New York President William Dudley, is still shaky and talk of a recovery may be premature.




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