Euro zone debt problems to last at least another year!
LONDON, England - August 19, 2010 - The symptoms of the euro zone debt crisis will persist for at least another year, according to a Reuters poll of 60 economists who see governments struggling to contain their vast debts for some time to come.
A slowdown in the United States poses the biggest threat to a sustainable recovery in the euro zone economy, the poll showed, with fiscal tightening and debt worries also seen as major risks to growth.
The crisis - defined in the poll as 10-year government bond yield spreads of at least two euro zone members staying above 100 basis points over German Bunds - will last at least a year, according to 55 economists who answered the question.
Twenty-six of them said it would last at least two years.
Several euro zone governments have committed to stringent austerity measures to regain control over swollen budget deficits, although many of these programs are still in the earliest stages.
"Only when some of these countries translate words into action, and some of these spreads start to come in, then perhaps markets will fully believe we're on the road to a longer-lasting recovery," said Mark Miller at Lloyds Banking Group. "I think that's going to happen over a longer, rather than a shorter, time horizon," he said.
