The creditworthiness of corporate borrowers in advanced economies has deteriorated while the volume of debt and financial risk taking has risen, the International Monetary Fund has warned.
It also flagged up concerns about the sovereign-bank nexus in the eurozone and about market conditions for low income and frontier countries.
i would add: the problem is the banks.
They do not provide enough liquidity for the real economy (companies and company founders with ideas).
if this is not correct: where can i apply for my 0% loan payable over 30 years?
so the whole thing you call EU economy goes bust!
What is needed?
If private banks do not want to fund entrepreneurs and startups… public banks should step in to fill the gap.
China has a public owned bank, so should have the US and the EU and every member state of the EU and Russia and India and Australia and the UK.
It was a public bank that was able to provide funds for projects for renewable energy that absolutely makes sense – if we agree on sustainability makes sense – that private banks would have never granted.
It works like this: the public bank provides a very cheap loan to a private bank which passes the loan on to the entrepreneur (the one who wants to buy and install a solar power plant on a roof top facing south, generating a lot of electricity, selling it to himself or the local power companies)
I think a major problem is that the US (indeed) sees itself as the successor to the British Empire and thus thinks it still has the “right” to govern it’s overseas colonies.
This relationship has to transform rapidly into a true honest and open partnership or relations will get more and more hostile.
Trump is NOT exactly the right candidate to do so, thus Putin welcomes whatever splits “The West” and “The West” is easily split… btw. “the EU” as “United States of Europe” will not work – for the simple fact – that the US is cultural much more homogeneous than Europe (most cultural diversity you can imagine) – so one size / one currency fits all is doomed to fail.
I surely can imagine that some people like the “one currency shall rule all of Europe” idea out of power greediness – but it will not work.
if IMF wants to see a strong EU economy – “the banks” need to provide liquidity for people with ideas that want to do companies, not even existing well running companies can get loans to redo their infrastructure these days – and the IMF blames it on them.
Would be the point to leverage – to make sure people actually have meaningful work and access to money (afaik “states” “the EU” can not go bust? unless the ECB wants it to?).
But then again – “the banks” are not obliged to take responsibility for society – they are only obliged to make profit – this is basically asking for self destruction and this is what we see right now.
PS: the IMF is based in Washington and thus just as the World Bank or Goldman Sachs has not exactly the will of the people in mind.