Greek debt crisis: What does it mean for the US?
Europe could be in for some major belt-tightening to handle the Greek debt crisis, as well as problems in Spain, Portugal, and Ireland. That could slow US economic growth somewhat.
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Other than the stock market, what other affect could Europe’s debt crisis have on the US economy?
- Some US companies that export to Europe may have a harder time competing if the Euro continues to weaken.
- A stronger US currency might cause some German or French tourists to reconsider a trip to New York or Miami.
- US banking regulators will be questioning the largest banks to determine how much they could potentially lose if a European nation somehow defaulted on its debt.
“At the moment it’s something we need to watch but not fear,” says Nariman Behravesh, chief economist at IHS, Inc., an economic research company in Lexington, Mass. “The US is growing almost three times as fast as Europe and the biggest impact is likely to be as Europe grows slowly, our exports to them grow slowly.”
How big a trading partner is Europe?
The slow growth may come about since economists expect European nations, such as Greece, Portugal, Spain, and Ireland to cut spending and perhaps raise taxes.