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The Impossible Problem

For my last blog post of the term, I have decided that I would look at the Eurozone crisis. There are endless amount of articles, literature, and media coverage on the subject the most recent on which I will be looking it is an article from the Globe and Mail this morning.

The aspect that I would like to discuss for this common topic of debate, is that it is a seemingly unmanagable problem. What I mean by that phrase is that for every suggested plan of action, there are parties that suffer. High debts, economic failure and civil uproar are just some on the causing factors in countries such as Egypt, Greece, and France to name a few. Not only are their debts substantially high, they are increasing exponentially as they are borrowing more money. In Italy and Spain, borrowing costs spiked again today, with Italian 10-year bonds well above 7 per cent.

Recent unsuccessful meetings between Strasbourg, German Chancellor Merkel, French President Sarkozy and Italian PM Monti sent the wrong message to markets and are causing growing concern around the issue and how it will be resolved.

The most concerning of all is that Germany is now becoming a forefront part of the crisis, increased exposure stemming from a failed bond auction. The concern worldwide is that this type of collapse is starting to affect core economies.

As I previously mentioned, some problems in the world and on a daily basis are somewhat unmanageable in the sense of making everybody happy. This situation in particular is one where it is impossible that everyone is kept happy and/or wealthy. So something must change and soon, but the question is: who will lose out?

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