If the sovereign debt problem in Europe triggers instability in global financial markets, it will exert an adverse impact on the global economy as a whole. To address the problem, further efforts in the following two areas are indispensable. One is strenuous efforts by Greece and other problem-stricken countries to reduce their fiscal deficits and to advance a structural reform to strengthen competitiveness.
In practice, sweeping reforms are usually introduced when favorable conditions arise, and the pace of reform will be slowed down if conflicts intensify.