Sovereign debt and the crisis in the Eurozone

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wineandcheese's picture
Joined: 26-10-09
Jan 15 2012 19:36
Sovereign debt and the crisis in the Eurozone
In our text “Financial Crisis 2008ff.” we tried to explain how a financial crisis such as that of summer 2008 results from the normal course of business and not from “mistakes” or “mismanagement”. Towards the end of the text we briefly touched on how states attempted to rescue the financial markets and that – as a result – sovereign debt itself becomes subject to the practical critique of these markets.2 In the last two years these policies seem to have been successful, insofar as the financial markets have, again, started to make a profit; however, as a result of the measures taken many states have now become lodged in a debt crisis of their own, which, again, is affecting the financial industry.

In our later text “Public debt makes the state go round” we then tried to explain how modern credit money and sovereign debt are related. However, there too, questions such as how states contract debt and why, who their creditors are and why, what the relation is between the GDP (gross domestic product) and sovereign debt and what the particularities of the Eurozone are, were only very briefly touched upon. In this text we attempt to fill this gap. First, we want to explain the standard and common practice of sovereign debt in general, as well as providing a critique of the most prevalent explanations for the current crisis. And secondly, we would like to consider the particularities of the crisis in the Eurozone.

PDF with all parts:

Edit: All four parts are available now.