By Jeroen Spangenberg

On Thursday April 14, 2011, Ida Petter, teacher at the University of Leiden, former employee of the Dutch Senate and currently senior advisor to the Minister of Finance has lectured on the economic situation in the Eurozone and sketched an image for the future.

Ida Petter started off by pointing out how the banking crisis of 2008 started with bad mortgages that could not be repaid, naming the fall of Bear Sterns and Northern Rock. Abn Amro and Fortis were nationalized by the Dutch government for 16.8 billion euro. The liquidity of money transfer among banks decreased and the EU central bank and the FED needed to take action. Then there was the ICESAVE bank that collapsed and nationalized by Iceland. Not long afterwards DSB bank went bankrupt.

All 27 countries in the European Union have national debts; on average it accounts for 80 percent of GDP. Greece increases the average the most with a national debt of 142.8 percent of GDP. The chance that Greece can repay its debt is small. The direct impact on the Netherlands is small, because Dutch banks do not have major investments in state bonds of Greece.

Ireland has a big national debt as well; however taxes are rather low and could be increased. Spain has a high rate of unemployment; however national debt is not as high as in Italy where national debt is 119 percent of GDP. In the Netherlands the government has to pay 100 million euro a month for the interest rate on the national debt.

The European financial situation is far from ideal; however it is not the end of the Euro, at least not yet.