‘Worst of debt crisis to come’

The worst of the eurozone debt crisis could still be ahead, according to a majority of investors surveyed by the credit ratings agency Fitch.

As part of its quarterly survey of investor confidence, it found that 29% of respondents felt that the current period of market calm will be short-lived; and 30% feel that the markets are irrationally exuberant in view of the weak economic outlook for the eurozone. The remaining 41% believe that the worst of the crisis may be over given the strong support provided by the ECB and policy makers.

“There is a stark dichotomy between the continuing recession with rising unemployment across Europe and the rally in financial markets, in Fitch’s view. If the latter is not validated by economic stabilisation and progress towards banking union, the danger is market volatility will return with a vengeance over the summer, as it did in 2012 and 2011.”