The European Central Bank on
Wednesday raised the risk that eurozone public debt
sustainability fears may return to financial markets. According
to the Financial Stability Review, "the economic recovery of the
last six months has boosted prospects concerning the
sustainability of sovereign debt in the eurozone. A prolonged
period of geopolitical uncertainty may slow economic growth and
lead to higher risk premiums. That would increase the costs of
funding and could trigger fears on the sustainability of debt in
some countries".
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