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Is Europe More Apt To Avoid Another Sovereign Debt Crisis?

Sovereign Debt Crisis
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EDITOR NOTE: Embattled Managing Director of the IMF Kristalina Georgieva spoke at a European event recently and shared her thoughts on the European economy and digital currency. She said that “Europe was more fit to avoid another debt crisis such as the one faced by Greece in the aftermath of the global financial crisis of 2007–08,” although they still need to “plan carefully” to wipe out the pandemic-related debt burden and avoid a sovereign debt crisis. As for Bitcoin, she said that it is more a “de-facto asset” rather than currency and that “In the history of money, it is difficult to think of [de-facto assets] as money." She also discussed countries planning on issuing digital currencies and stated her fears that people would not trust the value of these new currencies.

WASHINGTON, Oct 5 (Reuters) - Medium-term fiscal consolidation and growth will put Europe on a sound footing to avoid another sovereign debt crisis despite rising debt levels caused by the COVID-19 pandemic, the head of the International Monetary Fund said on Tuesday.

Managing Director Kristalina Georgieva, speaking remotely from Washington, told an event hosted by Bocconi University and the T20 group of think tanks that Europe was more fit to avoid another debt crisis such as the one faced by Greece in the aftermath of the global financial crisis of 2007–08.

But she said countries would have to plan carefully how to shift course to medium-term fiscal consolidation to erase the increased pandemic-related debt burden. 

Originally posted on Reuters 

 

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