An informative BBC video highlighting the current challenges facing the Euro currency. With some countries in the Eurozone having incurred too much debt, the real question becomes whether or not the fiscally prudent countries will continue to bail out the less fiscally disciplined. Germany, for instance, doesn’t want to bail out it’s neighbors but is arguably dependent on them to continue importing German goods. Will the European political environment support additional bail out efforts, or cause some European countries to simply bail?
Other critical considerations include the level of sovereign debt held by European banks. If the value of the sovereign debt of the at-risk countries falls, many of Europe’s banks (and possibly some U.S. financial institutions) could require even more capital.