Europe's Growing Crisis

{
  "authors": [
    "Uri Dadush"
  ],
  "type": "legacyinthemedia",
  "centerAffiliationAll": "",
  "centers": [
    "Carnegie Endowment for International Peace"
  ],
  "collections": [],
  "englishNewsletterAll": "",
  "nonEnglishNewsletterAll": "",
  "primaryCenter": "Carnegie Endowment for International Peace",
  "programAffiliation": "",
  "programs": [],
  "projects": [],
  "regions": [
    "Western Europe",
    "United Kingdom",
    "France",
    "Germany",
    "North America"
  ],
  "topics": [
    "Economy"
  ]
}

In The Media

Europe's Growing Crisis

Recent cuts to the credit ratings of Spain and Portugal indicate that the crisis in Greece is spreading across Europe. Given the financial market pressure on Greece, debt restructuring appears inevitable, but it remains to be seen when it will occur.

By Uri Dadush

Published on Apr 29, 2010

Source: The Diane Rehm Show

Standard & Poor’s recently cut the credit rating of Greece, as well as Spain and Portugal, indicating that the crisis in Greece is spreading across Europe. In order to avert the crisis, Greece will need to engineer an “enormous fiscal cut” in order to stabilize their rising government debt, said Uri Dadush. However, it will be “very difficult for the Greeks to dig themselves out of this situation while maintaining their projected debt payments.”

Given the financial market pressure on Greece, “inevitably, some kind of restructuring of the debt has to happen” but it remains to be seen when this occurs. It can happen now, under tremendous market pressure and when banks will be extremely fragile, or, if the EU and IMF provide sufficient support, it can happen in the coming years once the world economy has recovered.

About the Author

Uri Dadush

Former Senior Associate, International Economics Program

Dadush was a senior associate at the Carnegie Endowment for International Peace. He focuses on trends in the global economy and is currently tracking developments in the eurozone crisis.

Recent Work

Commentary
The Labors of Tsipras
- Uri Dadush
In The Media
Greece, Complacency, and the Euro
- Uri Dadush

Economy Western Europe United Kingdom France Germany North America

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

More Work from Carnegie Endowment for International Peace

Commentary
Emissary
Burnham Has a Narrow Window to Shape UK AI Policy
His challenge will come in balancing domestic priorities with a sharpening geopolitical environment.
Luke Cavanaugh, Scott Singer
Paper
The Alternative für Deutschland and Germany’s Unsettled Place in the World
Unresolved tensions within the AfD may ultimately constrain the its potential as a leader among European and global populist forces.
Jeremy Cliffe
Report
Europe from Scratch: Visions for a New European Order
As the EU confronts profound challenges, several leaders have called for fundamental reform to the union’s model—but only modest, superficial changes have resulted. What if Europe really could be reimagined from zero today: What should such a redesigned European order look like?
Richard Youngs, ed.
Paper
Egypt’s Military Landlord Economy and its Limitations
The armed forces champion a form of capitalism that is generating revenue, but its reliance on rent faces diminishing returns, leaving the country with massive sunk costs and deferred returns, deepening dependency on external borrowing.
Yezid Sayigh
Commentary
Strategic Europe
The Le Pen Verdict: How French Politics Turned MAGA
Far-right leader Marine Le Pen can—and will—run in France’s next presidential election. What does the outcome of her appeal against a 2025 embezzlement conviction mean for the country’s political future?
Catherine Fieschi

More Work from Carnegie Endowment for International Peace

Commentary

Emissary

Burnham Has a Narrow Window to Shape UK AI Policy

His challenge will come in balancing domestic priorities with a sharpening geopolitical environment.

Luke Cavanaugh, Scott Singer

Supporters of the far-right Alternative for Germany (AfD) party wave German flags at a campaign rally in front of the Berlin City Hall on June 29, 2026.

Paper

The Alternative für Deutschland and Germany’s Unsettled Place in the World

Unresolved tensions within the AfD may ultimately constrain the its potential as a leader among European and global populist forces.

Jeremy Cliffe

Report

Europe from Scratch: Visions for a New European Order

As the EU confronts profound challenges, several leaders have called for fundamental reform to the union’s model—but only modest, superficial changes have resulted. What if Europe really could be reimagined from zero today: What should such a redesigned European order look like?

Richard Youngs, ed.

Paper

Egypt’s Military Landlord Economy and its Limitations

The armed forces champion a form of capitalism that is generating revenue, but its reliance on rent faces diminishing returns, leaving the country with massive sunk costs and deferred returns, deepening dependency on external borrowing.

Yezid Sayigh

Commentary

Strategic Europe

The Le Pen Verdict: How French Politics Turned MAGA

Far-right leader Marine Le Pen can—and will—run in France’s next presidential election. What does the outcome of her appeal against a 2025 embezzlement conviction mean for the country’s political future?

Catherine Fieschi