Barclays said on Wednesday that the large developed economies face an increase in debt, as the Corona virus crisis causes a massive wave of financial stimulus but it has time to arrange the conditions in them, and in a new report on debt in developed markets, the British bank indicated that decision makers will not be able to ignore the conditions Financial deterioration for a long time.
The debt ratio, relative to the GDP of the G20 countries, is heading towards an increase above its levels during the Second World War next year, and Barclays expects the American debt rate to rise by about 30 percentage points in the next two years, while the debt rate is likely to increase in a region The euro reaches about one hundred percent in 2020, compared to about 85 percent in 2019.
He said, this is due to the fact that the largest economy in the world has the advantages of owning a reserve currency and a large and liquid bond market less vulnerable to fluctuations.
But the eurozone remains threatened as a monetary union without a monetary union.
Barclays said that the contraceptives of a new debt crisis in the euro area are high compared to the period between 2010 and 2012, noting a sharp decrease in financing costs.
The bank expects that the average nominal return on sovereign debt will drop to less than two percent, compared to 3.75 percent in 2010.
But despite the overall lower costs of lending in the eurozone, the differing economic trends between southern and northern Europe and its unique monetary system mean that they need to find a separate way to reduce total debt.
Barclays predicts that the redistribution of funds and credit and the application of the fiscal restraint policy by setting a ceiling on bond yields will be the most appropriate solution to reducing debt at income levels in heavily indebted countries.