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Denmark risks ending up like Spain – called to fix its housing market

Wednesday, 30 May 2012
Denmark has been warned that it should try and put down its astronomical real estate debt or risk becoming the next Spain. They are called to remember that very good economies can fall flat on their backs just because the market and computers are left to run the economy.

As such experts have warned that Denmark should take the EU's recommendations seriously, according to Hans Martens, director of the think tank European Policy Centre in Brussels.

One of the biggest problems for the Danish economy is the high housing debt. This is the conclusion that was reach today by the European Commission - and also from Hans Martens.
“We are a little on a time bomb with the interest-only loans. That was what made, for example, Spain to get into trouble,” he said according to radio Denmark.

It led to growing difficulties paying their mortgages. Therefore Spain’s problem became strong not because of bad policy on state budget but because of problems in its private households debts that got the banks into trouble.

If nothing is done, such can threatens Denmark which is in also a similar situation, the experts predict
“We have also seen in Denmark, how the savings and commercial banks are falling one after the other. And it can become a problem for public finances,” says Martens

Banking Crash puts a serious strain on the public purse. Therefore, the only solution is to force banks to have more money at the bottom of their money tank, so they can withstand any such crisis,” says Martens.
“The Government must ensure that they have sufficient reserves to withstand the pressures,” he said.
By Team

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