the finances of eurozone nations will spread around the world to
engulf the US and Japan, former Bank of England policy maker Willem
Buiter has warned.
the risk of a sovereign state defaulting on its debt, which thrust
the eurozone into crisis, will soon encompass the two major economies
as well, according to Citigroup economists led by Mr Buiter, who
sat on the Bank’s Monetary Policy Committee.
The team has
published a note forecasting much more strife to come in the wake
of Greece and Ireland’s recent bail-outs and eurozone governments’
borrowing costs hitting record highs.
the recent drama, we believe we have only seen the opening and second
act, with the rest of the plot still evolving," the team wrote.
"There is no absolutely safe sovereigns."
There are likely
to be several sovereign debt restructurings in the next few years,
the analysts said, with Portugal likely to need to access the emergency
funding facilities soon.
backdrop, the US and Japan – dubbed the "fiscal sustainability
deniers" – cannot keep ignoring the question of how safe their
public finances are, the team said.