Sovereign Debt Crises in the Eurozone: Are we witnessing a prelude of a breakdown of the euro? Timo Tyrväinen Chief Economist, Aktia Bank, Finland GIC ● Rome ● 7.4.2011 1
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How much more than states European large banks need to pay for external financing, %-points
Greece Ireland Portugal
Lehman subprime
6Source: Barclays Capital
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Can a country be dismissed from the EMU? What happends to a country which decides to leave euro? - If it were an unstable economy like Greece, Ireland or Portugal? - If it were a a stable economy like Germany or France?
If the ECB decides to hike rates, does it mean that it does not care about the weak economies? 8
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