And revealed European Central In its semi-annual financial stability report, high debt levels and large budget deficits, combined with weak long-term growth potential and political uncertainty, raise the risk of the financial slide reigniting market concerns about the sustainability of sovereign debt.
Low growth is a particularly thorny issue for countries such as… France andItaly The public finances are under pressure.
With market interest rates stabilizing at a higher range than they were before the pandemic coronaOverall debt servicing costs rise, meaning governments either raise taxes or find economies elsewhere to pay the rising interest bill.
And note European Central Bank The combination of low growth and high interest rates is also a problem at the corporate level, with the number of bankrupt companies rising in various sectors and countries, albeit at modest levels.
The outlook for financial stability is marred by growing macro-financial and geopolitical uncertainty coupled with growing uncertainty over trade policy, the bank’s vice president, Luis de Guindos, said in the financial stability report.
