Respected UBS economist George Magnus says sovereign debt default now presents a grave risk to the global economy.
“The sustainability of sovereign debt hangs heavily over bond markets and the prospects for economic and financial stability,” he wrote in the Financial Times.
Since 2007, budget deficits have soared, particularly in Iceland, Ireland, the U.S., Japan, the U.K. and Spain, Magnus points out.
“There is no peacetime precedent for the current speed and scale of public debt accumulation and it is difficult to assess the social tolerance for high debt levels and for the pain of protracted fiscal restraint,” he wrote.
Read More: – By Dan Weil, Moneynews