The European Union started a two-week probe of euro-area governments’ draft budgets as a re-emergence of the bloc’s debt-crisis nightmare risked undoing its economic recovery.
As yields on 10-year securities from Europe’s most-indebted nations surged yesterday, led by Greece and sweeping up Portugal, Ireland and Italy, the European Commission started a process of picking apart nations’ 2015 spending plans, seeking to defuse potential fiscal timebombs.
“Ultimately the success or lack thereof of this process has to be whether or not Europe can escape the Japanese scenario, or secular stagnation,” said Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute.
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