EU may get temporary respite
The European Union has still not recovered from the global economic crisis, and the PIGS countries namely Portugal, Ireland , Greece and Spain are pulling down the entire zone due to their huge public debt levels. These countries have seen the tax revenues go down sharply in the last two years, but have kept their public spending including lavish public sector salaries and pensions and medical covers.
Now the European Union has been forced to get into the act last week, by announcing a massive 900 billion dollars worth of financial rescue package, to help European currency stay around current levels. The Euro has crashed to multi year lows last week due to the fears of a sovereign debt crisis in the region.
Now banks are reluctant to lend to these four countries which in turn has triggered the crisis.