I. China's growing housing debt crisis

Macroeconomic policy questions external debt crisis

59 223. External debt crisis and development

60 187. External debt crisis and development

61 188. External debt crisis and development

58 203. External debt crisis and development

58 203 External debt crisis and development

58 203 External debt crisis and development

This is how the Latin American debt crisis of the 1980s, the Mexican Tequila crisis of 1994, the Asian debt crisis of 1997, and the Russian crisis of 1998 unfolded. It was also how the financial crisis of 2008 2009 transmitted itself to emerging markets.

(c) External debt crisis and development (A 60 139)

2. Why is the housing debt crisis the most serious problem?

It has been two decades since the last global debt crisis.

This distinction between foreign and domestic debt is particularly important in the context of the euro crisis, because eurozone countries cannot devalue to increase exports if this is required to service foreign debt. And the evidence confirms that the euro crisis is not really about sovereign debt, but about foreign debt.

A public debt crisis in Japan (as the combination of recession, deflation, and high deficits drove up the debt GDP ratio).

In some countries Argentina, Ecuador and the Russian Federation the debt crisis led to a suspension of payments or defaults on debt service.

The question of debt sustainability analysis is also key to the resolution of the debt crisis of other low and middle income countries.

Most economists failed to foresee the economic dynamics that actually led to the crisis, because they failed to pay enough attention to the rapid increase in US total debt. Instead, they focused exclusively on US foreign debt, ignoring household debt (mortgage and consumer debt), public debt, business debt, and financial debt.

Some countries achieved a real exit from a debt crisis, while others continued to face a lingering debt problem or are considering new debt renegotiations (as in the case of Ecuador).

The debt crisis continues to rage in many countries in Asia, Latin America and Africa.

Prior to the crisis, banks had often been net sellers of foreign government bonds, but they significantly increased their purchases during 2008 2009. With the onset of the European sovereign debt crisis in 2010, banks appetite for public debt fell again.

Initially a financial crisis, it morphed into a classic public debt crisis after governments stepped in to guarantee banks obligations. That, in turn, has created a new set of worries for banks that are over exposed to supposedly secure government debt.

We are, however, concerned that many African countries remain burdened by debt, and we call for urgent measures to address the debt crisis of those countries.

Recalling its resolution 58 203 of 23 December 2003 on the external debt crisis and development,

(c) External debt crisis and development (continued) (A C.2 60 L.3 and L.51)

See report of the Secretary General entitled External debt crisis and development (A 59 219), paras.

(c) External debt crisis and development report of the Second Committee (A 60 486 Add.3)

CLAREMONT, CALIFORNIA The debt crisis in Europe is no longer a European affair. Coupled with fears of a double dip recession in the United States, the European debt crisis is dragging the global economy into another cycle of financial panic and economic recession.

It is also well known that a liquidity crisis can become a solvency crisis if the relief on debt servicing is not sufficient to promote a strong recovery.

Taking note of the report of the Secretary General on external debt crisis and development,A 57 253.

The eurozone sovereign debt crisis appears to have been the worst managed financial crisis since Argentina s default in 2001. The European Union and eurozone leaders have seriously discredited themselves.

3. Stresses the importance of the continued substantive consideration of the sub item on external debt crisis and development

A fiscal crisis in the United States (owing to further political fights over the debt ceiling and another government shutdown).

With governments around the world (including Germany s) accumulating unprecedented levels of peacetime debt, markets are worrying about sustainability. Some crisis prone countries such as Latvia are already unable to sell any more debt.

A third point of view is that, given the massive financial crisis, Europe s debt problem should have been diagnosed as an insolvency problem from the start, and treated with debt restructuring and forgiveness, aided by moderately elevated inflation and structural reform. This has been my viewpoint since the crisis began.

Indeed, where adjustment programmes persisted, the investment cycle often remained volatile, even after the immediate disturbances of the debt crisis subsided.

The experience of the recent eurozone crisis stands in sharp contrast to the Latin American debt crisis in the 1980s, when banks were not allowed to exit precipitously from their loans. If the new proposal is adopted, the IMF would conditionally refuse funds to countries carrying debt burdens that Fund staff determine are most likely unsustainable creditors would first have to agree to a reprofiling of debt.

But the stimulus measures transformed a banking crisis into a fiscal and sovereign debt crisis. From 2010 onwards, governments started to raise taxes and cut spending in response to growing fears of sovereign default.

In Europe, the absence of a political union considered a necessary precondition for sharing debt obligations and, thus, putting the euro on a sound footing is widely held to lie at the root of the continent s crisis. But the US crisis suggests that political union is no panacea for managing sovereign debt.

Cleaning up high private sector debt and lowering public debt ratios by growth alone is particularly hard if a balance sheet crisis leads to an anemic recovery. And reducing debt ratios by saving more leads to the paradox of thrift too fast an increase in savings deepens the recession and makes debt ratios even worse.

Recalling its resolutions 58 203 of 23 December 2003 and 59 223 of 22 December 2004 on external debt crisis and development,

In 1996, when Japan s public debt GDP ratio reached 80 , many Japanese economists and officials worried about a looming crisis. Almost two decades later, the ratio has surpassed 200 and still no crisis has erupted.

The simplistic diagnosis of Europe s woes that the crisis countries were living beyond their means is clearly at least partly wrong. Spain and Ireland had fiscal surpluses and low debt GDP ratios before the crisis.

Everyone knows that Greece will be unable to work its way out of crisis without massive debt relief. The only question is whether the country s debt restructuring will be orderly and controlled or chaotic and contagious.

PRINCETON Europe s debt crisis has piqued Europeans interest in American precedents for federal finance. For many, Alexander Hamilton has become a contemporary hero.

Recalling its resolutions 58 203 of 23 December 2003 and 59 223 of 22 December 2004 on the external debt crisis and development,