JEREMY HOBSON: The European debt crisis has taken another turn for the worse. The ratings agency S&P has lowered it rating on Greece’s debt — again. And now, a leading European economist is forecasting that some of Europe’s heavily indebted countries will default on their debt.
Marketplace’s Stephen Beard has the story from London.
STEPHEN BEARD: Greece is reported to be seeking another bailout. That’s on top of last year’s $157 billion rescue package. The Dow Jones news agency says the Greeks are expecting a further $85 billion in emergency loans. S&P’s downgrade — however — suggests that something more drastic might be needed. That Greece will have to default on some of the bonds that’ it’s issued.
Economist David McWilliams is a former official in the Irish Central Bank:
DAVID MCWILLIAMS: There has never been — ever been — in the history of monetary economics a country that has got out of a massive debt/banking crisis without a default.
But the fear is that if Greece defaults in a disorderly way, then other heavily indebted countries that use the euro — like Ireland, Portugal and perhaps even Spain — might follow suit. That could trigger the second leg of the financial crisis in Europe.
In London I’m Stephen Beard for Marketplace.
News and information you need, from a source you trust.
In a world where it’s easier to find disinformation than real information, trustworthy journalism is critical to our democracy and our everyday lives. And you rely on Marketplace to be that objective, credible source, each and every day.
This vital work isn’t possible without you. Marketplace is sustained by our community of Investors—listeners, readers, and donors like you who believe that a free press is essential – and worth supporting.