Wall Street Journal
March 2, 2011
U.S. Federal Reserve Chairman Ben Bernanke said Wednesday he’s confident that the European Union will successfully handle its continuing sovereign debt crisis.
“We’re watching it very carefully, but at the moment .. my expectation is that Europe will solve the problems because they are very committed to preserving the euro and the European unification project,” Bernanke told the House financial services committee.
Europe, with the help of the International Monetary Fund, has temporarily stemmed contagion of the debt and government budget crisis in the periphery of the European Union. But markets worry that if E.U. officials don’t resolve their political differences on the longer-term debt and budget crisis, the problem could worsen. The uncertainty and riskiness is pushing the cost of borrowing the hundreds of billions of euros necessary to fund government budgets near to unsustainable levels.
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