Johnson global finance expert Andrew Karolyi says Euro-fears are justified
Tells CNN Money that the fundamentals exist for continued failures and for over-burdened 'healthier' neighbors to weaken as they take on more and more assistance load
According to CNN Money (Nov. 24), Europe's New Contagion Worries
are justified and virulent as ever, posing a new risk to the health of the global financial system and economic recovery.
Says CNN, in the spring, the Greek debt crisis and looming problems in the other so-called PIIGS countries of Portugal, Ireland, Italy and Spain caused markets around the world to fall and raised fears of a global double-dip recession.
The worry then was that a default in Greek government debt would ripple across the continent and then around the world, causing problems for major global banks that invested in the debt and once again locking-up financial markets.
The Greek bailout plan and the establishment of a European bailout fund for future problems in May quieted those fears for a little while. But within the last week there have been new worries in Europe
Andrew Karolyi, professor of Finance at Johnson, and 2010 featured keynote speaker at NTU Conference on Finance in Taiwan
, told CNN that problems with the PIIGS could eventually hurt the more wealthy countries that are part of the euro-zone as well.
"Even the safe nations like Germany and France will have to face up to the burden of supporting their weaker brothers and sisters," he said.