Et Vous, France?
August 10th, 2011
The debt crisis took another troubling turn today, as France and Germany are now rumored to be on the S&P chopping block, as the European debt crisis threatens to consume the region’s economic giants.
The two countries, which have contributed billions of euros to the European Central Bank’s numerous bailout campaigns, are now beginning to take heat from investors and ratings agencies over the negotiations. , and a downgrade by either nation could spark a worldwide financial panic (if one doesn’t exist already). While the agencies have denied the rumors, and have said France’s top-tier rating is ensured because they are making a serious effort to balance their books, the whispers rattled France’s CAC 40 stock index, sending it down 5% yesterday.
The events in Europe should serve to illustrate the dangers bailouts and central banking pose to struggling nations. In the case of Europe, it has become evident that one nation’s struggles could drag down everybody else, and the mutually-shared currency is suffering because of it. In fact, there are now talks that this sovereign debt crisis could spell the end of the euro, and given the amount of grief it has caused the continent since its implementation, it’s dissolution should be welcomed.
