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Article:

How the Fall of the Euro Will Affect Us All

If the Euro Hits the Skids, What Will That Mean for the United States?

Greece, Spain & Italy

The main concern about Greece has been the possibility that the country will stop using the euro and revert to its old currency, the drachma. If that happened, the drachma would immediately plummet in value, as compared to the euro, Quinn explained. People and institutions who own Greek debt would then be paid back in a currency worth less than the euros they expected.

The global markets are also worried about Spain and Italy. Because investors are concerned about the stability of the Spanish and Italian economies, they are demanding much higher interest rates for money they lend to these governments (that's what the economists are talking about when they mention "high bond yields"). The two governments, therefore, find themselves having a harder and harder time paying off their debts while keeping things running.

 

  • Sarah Shemkus

    Sarah Shemkus is an award-winning freelance journalist, marketing enthusiast, accomplished baker, occasional globetrotter and total nerd (with a particular fondness for spreadsheets). Most recently, she reported on business and real estate … Read more...