Media reported the return of the sovereign debt problem to Europe

The problem of sovereign debt has returned to Europe for the first time in almost five years amid rising interest rates and the resumption of the excessive deficit procedure. This was reported by Die Presse newspaper on December 29.

It is specified that even during the pandemic the growth of sovereign debt in European countries was not considered important, as interest rates remained low. In addition, the European Commission has imposed a temporary moratorium on the excessive budget deficit procedure since March 2020, which was extended due to the situation in Ukraine.

Now the deficit procedure has been resumed, interest rates have risen significantly, and low interest rate bonds in Europe are set to expire in 2025.

According to the article, France is particularly concerned about this issue, which, with the region's second largest economy, has a combination of rising debt and political instability that has emerged amid French leader Emmanuel Macron's announcement.

"So public debt becomes a problem again. And it is unlikely to disappear in the near future," the newspaper summarizes.

Earlier, on December 27, US Treasury Secretary Janet Yellen said that the US will return to a fixed government debt ceiling in January. She also warned that after America reaches the debt ceiling in the period from January 14 to 23, the country's Ministry of Finance will be forced to take emergency measures to avoid a possible default.

Before that, November 15, it became known that the U.S. national debt for the first time reached a record $36 trillion. The debt figure rose by $1 trillion in three and a half months. It reached $35 trillion on July 29 of this year.

On November 5, newly elected U.S. President Donald Trump said that he would order to pay off the national debt with cryptocurrency. The American politician noted that cryptocurrency has a "great future".

Specialists of the International Monetary Fund (IMF) called the growth of the US state debt a threat to the world economy. Thus, by 2032, the country's national debt may exceed 140% of GDP. The IMF urged American politicians to carefully consider raising indirect taxes and a gradual increase in income tax.