THE EU have admitted that a international financial crash could expose massive debt problems in some member states, they revealed in an economic forecast report.
By DAN FALVEY
Thu, Feb 8, 2018
Concerns of a global recession have grown in recent days after the Dow Jones plunged 1,600 points earlier this week and the Japanese stock market index, Nikkel, experienced its biggest one day move since the election of President Donald Trump one year ago.
In a bitter blow to Brussels, the EU Commission’s Winter 2018 Interim Economic Forecast warns that if a global financial crash does occur, it could cause put severe strain on countries with high levels of debt.
It warned that “the possibility of tighter global financial conditions as well as the potential of a sharp correction in financial markets” could because by “a faster than-expected tightening of US monetary policy” and cause problems for member states.
It added: “This could expose fragilities related to the debt overhang in a number of Member States.”
Greek debt soared after the 2008 economic meltdown when the EU was forced to bailout the country.
Ever since then it has been desperately trying to pay back the EU loan while keep it’s economy afloat as the burden of its own national debt crushed its economy.
The crisis triggered a 26 per cent decline as Greece’s GDP fell from €242billion in 2008 to €179billion in 2014.
The unemployment rate rose from below 10 per cent in 2009 to around 25 per cent in 2015.
By the third quarter of last year, Greece’s public debt totalled €313.5billion or 177.4 percent of the country’s GDP.
Another global crash would be in danger of crippling Greece which has highest public debt in the EU.
Meanwhile, Italy and Portugal are among other member states which are in danger of an economic disaster if the stock markets collapse.
However, despite the potential of a n international economic downturn causing chaos across the EU, Brussels bureaucrats used the report to boast the positives surrounding the trade bloc’s future.
The EU’s GDP is expected to grow by 3.3 per cent in 2018 and two per cent in 2019.