Austria Is One of Three Euro Countries with Lowest Default Risk
Only three euro countries were found to have low default risk combined with a positive trend. The euro zone is seen in an “existential crisis”.
According to a study of the Center for European Policy (CEP), Austria is one of the three euro countries which have the lowest default risk and the most positive economic outlook. Based on several indicators from the previous year, seven countries of the euro zone were ranked in the green category which stands for the lowest risk. Of these countries, however, only Germany, Estonia and Austria show a positive trend. Slovenia, Slovakia and Ireland can be found in the second category, France, Spain and Italy in the third one. Malta, Cyprus, Portugal and Greece received a red assessment for the highest default risk.
The CEP Default Index measures the development of the individual countries’ capability to pay back foreign credits – in other words, their creditworthiness. The Index assesses the net lending or net borrowing of the total economy and the resources used to increase the physical capital stock for a certain period.
According to the study, the euro zone is facing an existential crisis. The “increasingly dramatic rescue measures” that have been taken to save over-indebted euro states from insolvency had failed, without exception, to calm the situation, the CEP concluded.