Europe Sovereign Debt Concerns.
The concerns about debt in Europe have been effecting markets in a huge way.From about a week most of the world’s stock markets have seen lows. And this trend is expected to be continued in future also.
European sovereign debt crisis has been a concern persistently for the markets world wide from late 2009. In 2010, apprehensions about the European debt crisis have reached a new high as a result of the debt crash in Greece. The debt crisis was mainly concentrated in Greece and other euro zone members like Spain, Poland and Ireland.
These euro zone countries have borrowed funds from banks and various other financial institutions to create funds for their countries’ budgets. This has led to a huge financial crunch in Europe which apparently had its effect all over world.
Even though the Euro zone countries are extending their helping hand to Greece to come out of the crisis, it is very well known fact that the debt crisis like these at such at huge scale cannot be reverted overnight. Therefore, the world markets are concerned about the European debt crisis which has resurfaced from May 2011. Future plunge in world markets is expected regarding this crisis.
The financial speculators and hedge funds dealing in euros’ sale have been criticized by prime ministers of Spain and Greek for worsening the situation of crisis. The role of Goldman Sachs in Greek bond yield increases is also under scrutiny. It is not yet clear to what extent this bank has been involved in the unfolding of the crisis or if they have made a profit as a result of the sell-off on the Greek government debt market.
In response to accusations that speculators were worsening the problem, some markets banned naked short selling for a few months.
Though only Few Euro zone countries have been involved in this sovereign debt raise virtually the whole world has being effected.And financial markets across the globe have been reflecting there concerns through falling stock prices especially of IT industry and banking sector which are worst effected sectors due to the financial crisis in Europe.
Experts predict that Europe sovereign debt crisis could be one of the driving forces through stock markets all over world. However, this can be very good time to make purchases as the prices are running low.