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Crisis conditions didn't end in 2009. Stabilization was temporary. Fundamental problems fester. They've metastasized to other countries.
To avoid debt defaults, troubled nations dug deeper holes. They borrowed more to meet payment obligations. They restructured old debt without fixing core problems. They imposed austerity when stimulus is needed.
They raised taxes, reduced spending, laid off public workers, cut pay and benefits, and sold off government assets. Instead of alleviating problems, they've grown.
Periphery economies are most troubled. Northern EU nations and banks are lenders of last resort. Germany bears the greatest burden. At issue is for how long.
Stronger economies loan to ensure their banks get paid and creditors aren't harmed. Their outstanding loans are huge. Failure to service them assures huge losses or worse.
As conditions fester and grow, lenders of last resort may become borrowers. Who'll help them when all economies are troubled. Currently, in fact, cumulative government debt way exceeds available resources.
If core EU countries and central banks let the ECB usurp government lending authority, sovereign debt holders face stiff haircuts. Eventually it's coming. Conditions are worsening, not improving.
Recession means less tax revenues. Borrowing increases to meet debt obligations. Austerity weakens economies further. A downward cycle feeds on itself. Other countries may end up like Greece.
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