Here’s How Europeans Are Reacting to the Shutdown’s End
Many Europeans have echoed sentiments from around the world by praising the government of the United States for coming to a deal to avoid a debt default. With the U.S. government having shutdown since the beginning of this month — effectively laying off hundreds of thousands of non-essential employees — many overseas had expressed concerns that the happenings in America would negatively impact the rest of the world. This was seen in many stock markets, where gains were mediated and losses worsened by the uncertainty regarding the shutdown.
What was of paramount concern to many European officials was a potential default of U.S. government debt. Such a default, and any downgrading of credit ratings that would accompany the move, would cause turmoil in the world bond markets. Since many borrowing rates are tied — directly or indirectly — to U.S. treasury bond rates, an increase in U.S. bond yields would mean that countries around the world would have to pay more to borrow money.
This would be especially crippling for countries such as Greece, Portugal, and Ireland, all of whom are looking to re-enter international bond markets after being shut out during the recent bailouts.