Bernard Hickey : Why Australian banks are crucial if NZ goes bankrupt - Business - NZ Herald News: "What would happen if the world judged New Zealand Inc was unable to service its debts?
Unfortunately, these are not idle questions any more. Our net foreign debt is as high as Greece's and Ireland's, both of whom have just suffered the indignity of being 'bailed out' by the international powers-that-be after effectively being judged bankrupt as nations.
In their cases the International Monetary Fund and the European Union dictated massive cuts in public spending and new taxes. Their downfalls were preceded by credit rating downgrades.
Standard and Poor's put New Zealand's AA+ credit rating on negative outlook a few weeks ago. As recently as March last year Ireland had a credit rating that was one notch better than New Zealand's.
The former Celtic Tiger also once had public debt levels similar to ours relative to GDP, but now has a rating four notches below our rating."
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Why Australian banks are crucial if NZ goes bankrupt
» Why Australian banks are crucial if NZ goes bankrupt - Business - NZ Herald News
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