Trichet Says Cancelling European Debt a ‘Recipe for Catastrophe’

The video discusses the controversial idea of the ECB holding or canceling government debt, which is deemed illegal but theoretically possible if treaties are changed. The speaker argues against this, citing risks to credibility and investor confidence. Instead, the focus should be on managing debt sustainably post-pandemic, avoiding premature austerity, and ensuring debt diminishes as a proportion of GDP to maintain trust and avoid economic catastrophes.

What are the potential consequences of holding government debt in perpetuity?

Why is it considered naive to assume that the world will eternally trust the signature of the Treasury?

How does the speaker view the relationship between austerity measures and the current level of debt?

What actions should be taken to manage debt after the pandemic according to the speaker?

What does the speaker suggest is necessary for the debt to be considered sustainable?