The bigger beast that threatens Europe’s solvency is the demographic and entitlements crisis. While a lot is known about Europe’s aging population, the scale of the problem and its urgency are not well understood.
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To get a sense of how large this problem is it’s worth putting it in perspective. The cost to bailout the banks after the 2008 subprime crisis cost 1.1 trillion dollars globally. The cost to bailout Europe’s periphery is 700 billion euros so far and counting. However, the cost to bailout the union from an entitlements crisis would be on a far larger scale and could bankrupt the entire currency bloc.
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This is an interesting article on the impact of demographics and the future of Europe’s deficit problems, although it is short on details.
Read the rest of the article here:
http://blogs.reuters.com/great-debate-uk/2011/07/04/europe%E2%80%99s-bigger-crisis-waiting-to-happen/
Kondratieff Long Wave 