Given its size and the need to service each year a significant amount (around € billion), the danger of triggering a vicious circle between the cost of the debt and its share of GDP, with repercussions on the real economy, is ever present.
Confidence is also, of course, an important factor influencing business decisions to invest and to expand. Indeed, a lack of confidence has been one of the factors holding back investment in many countries over recent years. So given that this is the CFA’s Australia Investment Conference, I thought it appropriate to focus my remarks today on the topic of investment.