Multimedia

Sovereign Debt: A Modern Greek Tragedy

May 8, 2012

Part 3: Why Is Europe Having a Sovereign Debt Crisis Now? (8:19)

Many European nations have had high debt burdens for decades, though no developed and industrialized country has defaulted since 1946. So why has a sovereign debt crisis surfaced now? Waller looks at the history of the formation of the European Union (EU), which focused on a monetary union, not a fiscal union. While it established five criteria for membership (concerning long-term interest rates, inflation, exchange rates, deficit-to-GDP and debt-to-GDP), no contingencies were made for a secession or ouster of a nation. In addition, when Greece won entry to the EU in 2000, it met none of the five criteria.

Part 1: Welcoming Remarks, Julie Stackhouse (5:44)
Part 2: The Ability vs. the Willingness To Repay Debt (14:45)
Part 3: Why Is Europe Having a Sovereign Debt Crisis Now? (8:19)
Part 4: Waking Up to the Great Shocks (6:20)
Part 5: Insuring Against Default and Higher Rollover Risk (4:54)
Part 6: Austerity Measures and the Real Default Threats (8:55)
Part 7: The Moral of the Tragedy (8:29)
Part 8: Q&A Part 1 (14:25)
Part 9: Q&A Part 2 (18:18)