Rebirth of England.

Chapter 681 Sovereign Debt
It is worth mentioning that there are differences between the EU and the eurozone.

The eurozone is made up of countries that use the euro as their legal currency. Countries in the eurozone are generally EU countries, but the reverse is not true.

For example, Britain is now a country in the European Union, but not a country in the eurozone, because Britain still uses the pound sterling, not the euro.

The upcoming European sovereign debt crisis will mainly occur in the countries within the eurozone, which is also related to the pros and cons of the eurozone.

As we all know, a country's monetary policy is related to its economic situation, and it can often adjust the economy by controlling the exchange rate.

But countries in the eurozone cannot do this.

Because the issuance of the euro and related policies are formulated by the European Central Bank and are not influenced by a single country - in fact, as the core countries of the euro zone, France and Germany have the greatest influence.

So if this is the case, why are so many countries willing to join the eurozone?
One of the important reasons is that joining the Eurozone makes it easier for these countries to borrow money. After all, when small countries like Greece and Iceland borrow money from abroad, the corresponding conditions will definitely be much worse than those of countries like Britain, France and Germany. Not only will banks charge higher interest rates when lending money to these countries or buying their government bonds, but the amount will also be relatively much lower...

But joining the eurozone is different.

First of all, the Eurozone has relatively high requirements for the financial conditions of the countries joining it, which gives capitalists the impression that the countries that can join the Eurozone are relatively stable economically.

In addition, there is a bottom line - once you have joined the eurozone, other eurozone countries will not allow your economy to collapse and will provide assistance, so banks and investors will have more confidence in this country.

Back to Greece, this is why it hopes to join the eurozone.

But there was a problem at the beginning. It was difficult for Greece to join the euro zone because it could not meet the standards stipulated in the Maastricht Treaty, namely, a budget deficit of 3% of GDP and a government debt of no more than 60% of GDP.

So their government hired Goldman Sachs to optimize its finances. Goldman Sachs tailored a "currency swap" for Greece, which helped Greece conceal a public debt of up to 10 billion euros to meet the standards of the eurozone member states, and eventually allowed it to join the eurozone smoothly...

Sure enough, with the involvement of Goldman Sachs, if nothing unexpected happens, something unexpected will happen...

After joining the euro zone, the Greek government finally began to borrow money with confidence, and then they encountered the subprime mortgage crisis. When the global economy fell into recession, the Greek government began to find it increasingly difficult to conceal their true foreign debt situation.

Of course, another reason why Greece is now approaching a sovereign debt crisis is its high welfare policy at home. In order to please voters, successive Greek governments have blindly increased welfare for voters. However, these high welfare benefits are not based on sustainable fiscal policies, but are provided by massive borrowing.

This led to a widening of the Greek government deficit, a surge in public debt, and ultimately calls into question its ability to repay its debts.

Baron knew that before the end of this year, the Greek government's sovereign debt crisis would break out, and after Greece, the other four countries of the European Five Pigs - Portugal, Ireland, Italy and Spain - would also fall into sovereign debt crises one after another, and eventually the impact of this crisis would spread throughout Europe.

Well, the reason why Portugal, Ireland, Italy, Greece and Spain are called the five pigs of Europe is because the first letters of their country names can form "PIGS"...

And the public deficits of these countries all exceed 3%!

In fact, the five European pigs were originally called the "four stupid pigs". The "I" in "PIGS" refers to Italy, but later Ireland was added with the first letter "I", so the "four stupid pigs" became the "five European pigs", and the "I" corresponds to Italy and Ireland. Since there is such an opportunity to short, Barron will not miss it - after all, Britain is not a country in the euro zone, and the "five European pigs" at that time will let the euro zone leaders France and Germany have a headache.

Of course, in addition to Barron, Wall Street will naturally not miss such an opportunity to reap the benefits of Europe.

After all, they had just lost a lot of blood in the subprime mortgage crisis. Although they had absorbed a little blood from Japan and South Korea, how could it satisfy their appetite? Of course, they had to continue to absorb blood from old Europe.

With Barron's current influence and strength, it is naturally impossible to avoid the European sovereign debt crisis - and this crisis itself can be said to be the result of those countries' own actions.

Then wealth will not disappear, it will only be transferred.

Since wealth is destined to transfer, in order to maintain Europe's strength, Barron can only let more wealth transfer to himself, rather than all flowing to Wall Street...

It can be considered as bearing humiliation and bearing heavy burdens.

Of course, even after making this decision, Barron still instructed his think tank to conduct a detailed investigation into the debt problems of these European countries. After all, the current situation is likely to be somewhat different from that in his previous life.

He could no longer rely solely on the time nodes in his memory of his previous life to make arrangements, but also needed to formulate an action plan for short selling after investigation and analysis.

After having sufficient data and intelligence support, all of this was handed over to Daisy to arrange.

It is also worth mentioning that Rami has now joined the DS Group and is interning under Daisy.

Rami is the older brother of the Palestinian siblings adopted by Barron. He is 17 years old and has completed college.

Before, Barron gave him 5 pounds of funds, and he eventually appreciated the funds by more than 20 times. Before being allowed to enter the DS Group, the funds in Rami's account had exceeded 100 million pounds!
As a result, he eventually became the youngest employee of DS Group, and Daisy, who admired Lamy's talents very much, was ready to focus on training him.

……

"Have you really made this decision?"

Countess of Bute took Bonnie's hand and asked her cousin with concern.

"Yes, Chris, I've thought about it. This is an acceptable outcome for everyone, isn't it?"

"But what about you?"

Bonnie's expression was very calm at this time. She was silent for a moment and said:
"I've been ready for this from the beginning, now it's just a matter of making sure this moment comes."

(End of this chapter)