France wasn't the only European country to hold elections yesterday, but the feeling across the continent was certainly one of change. From local elections in Italy to a tight presidential race in Serbia, competitions outside of France told equally interesting stories about changing attitudes toward life in the Euro-zone. Andrew Walker is a correspondent for our partner the BBC, and Ken Rogoff is former chief economist at the International Monetary Fund.
It’s only been a few days since lawmakers in Washington agreed on a budget for the next fiscal year, but Democrats and Republicans are already gearing up for the next big budgetary showdown: raising the nation's debt ceiling. In the coming months, Congress will have vote on whether to raise the debt ceiling, something Tea Party Republicans say they won't support in hopes of forcing President Obama and Congress to cut spending. But for every dollar the government spends, it has to borrow forty cents. In February, Fed Chair Ben Bernanke said that the economic results of not raising the debt ceiling and defaulting would be "catastrophic"
Greek's debt crisis has the European Union worrying about a possible domino effect. Spain and Portugal have already seen their credit ratings downgraded, and Ireland and Italy may be next. Some fear that Greece's crisis may deal such a sharp blow to confidence in the global credit market that we see a repeat of the global financial crisis.