On the last day of the month, the quarter and the first half of 2012, European leaders have a plan for the ongoing debt crisis. And it couldn’t have come at a better time.
According to my calculations, 14 out of 27 countries in the European Union have public debt exceeding 60% of their gross domestic product at the end of 2010.
A picture is worth a million words:
Clearly, there are a number of countries in debt trouble. For comparison purposes, I included my calculation for the percentage of U.S. debt to GDP which came in at 107%. However, the official Congressional Budget Office puts it at 70%.
The new plan would bail out banks via a regional bailout fund—which will not add to the sovereign debt of those countries. They will also ease austerity cuts that have been the main reason for protests and political upheaval in countries like Greece.
The markets rallied on the news. As of this moment, the Dow is up 210 points or 1.67%, the S&P 500 is up 24 points or 1.85% and the NASDAQ is up 60 points or 2.12%.
This is great news following the calamity the markets have experienced in the last two weeks and a great end to the quarter and first half of the year.
We’ve seen excitement over European debt plans wane quickly, but, hopefully, this will be a solid plan and compromise that will keep Europe moving in the right direction.
No matter what, we’ll stay on top of the breaking developments here on NavellierGrowth.com.