European debt crisis is “three in one” says Fidelity’s Greetham

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The sovereign debt crisis amounts to “three crises in one”, says Fidelity’s Trevor Greetham.

Greetham, director of asset allocation at Fidelity Worldwide Investment, say the current economic siutation in Europe is less a crisis of government profligacy and has more in common with the Asia crisis in the 1990s.

The problems facing Europe are summarised by Greetham as: “A market crisis as bank and sovereign liquidity dries up; an economic crisis with the bubble years leaving the periphery uncompetitive versus Germany; a political  crisis, with core countries understandably reluctant to bank roll peripheral governments.”

A lack of public support for the austerity measures, combined with high levels of private and public debt means they are unlikely to succeed, adds Greetham.

Instead, it is “full burden sharing”, European Central Bank support and forceful policies which inspire growth that are required to finally end the crisis.

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