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By Dr. Bruno Colmant, Ph.D., CFA, Professor at the Vlerick Business School and the Catholic University of Louvain, Member of the Royal Academy of Belgium
The sovereign crisis is jumping from one surprise to another, as each monetary shock leads to solutions that were inconceivable three years ago. Iceland's monetary implosion, the Greek default and the seizure of bank deposits in Cyprus are all likely to be part of the new financial paradigm. In southern countries, we might see further restructuring of public debt, nationalisation and capital controls until an inflation spike ends the erosion of public debt, creating an unmanageable situation. We already know that public debt must be brought down by 30%, a requirement that, in these recessionary conditions, cannot be...
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