European debt increases as divisions widen
The debt accumulated by the Euro zone has reached its highest point since the euro was intriduced in 1999. Bloomberg News reports that the debt of the 17 euro nations rose to 87.2 percent of gross domestic product in 2011 from 85.3 percent the previous year – largely as a consequence of multiple bailouts of Greece and other nations.
That debt will only worsen as all signs point to the coming need to fund a bailout of Spain, but the European Central Bank has indicated it is not warm to the idea of once again coming to the rescue. The United States and the International Monetary Fund both favor more aggressive action – and aid – to cope with the ongoing financial crisis within the Euro zone.
While much of the focus of the IMF has been on dealing with the financial crisis in Europe and bolstering its rescue fund, IMF head Christine Lagarde may be facing an even greater challenge in convincing those very same nations to afford emerging economies a greater role within the body.