|
Abstract:
Debate over the management of the euro zone has highlighted a deep lack of understanding of the status of debt in modern, financialised economies. The idea that financial markets play the role of rational vigilantes on the debt front is particularly far from reality. Moreover, the main principles which structure capital markets, especially those which focus on the idea of liquidity are consubstantial to ebbs and flows, bubbles and crises, which affect major economic zones. The three successive crises which have occurred since 2007 (USA, euro zone, emerging markets) reveal how this structure functions, in a context of world imbalances. In addition to this, it seems that financial trends have great influence over the orientation of economic strategies. In this regard the appetite for southern euro zone debt, which is notably due to the 'emerging market rout', seems to be a risk bearer. Understanding the logic behind the capital markets and the status of debt would provide governments with the necessary room to manoeuvre for a return to genuine growth.
|
