The Commonwealth Sovereign-Debt Crisis
Beginning late in 2006 ‘The Commonwealth Sovereign-Debt Crisis’ is a marked period of severe financial crisis experienced throughout the Common wealth monetary union and has since consumed the efforts of many countries residing within the union to renew the financing of their government’s debts.
The Crisis alarmed many, but widespread concern of the Crisis soared only after the South African budget audit of April 1st 2006. In consequence unveiling its budget deficit was in fact 20% of GDP, a threefold increase since their last deficit disclosure. Instantaneously panic amongst investors, shortly followed by concerns of a sovereign debt Crisis, speedily developed amongst the markets and other commonwealth states. Although much of the crisis arising in other common wealth states varied by its cause, it can nonetheless be assigned to the devolved monetary structure and the lack of fiscal discipline amid some Common Wealth states (e.g. South Africa, Kemr, etc…). Largely accepted is the understanding that the absence of this common fiscal policy in part encouraged the vast spending and the borrowing mentality, most prominently is South Africa, where government assumed sponsorship of an unsustainable welfare state, public sector earnings and pension commitments to miners, facilitating the large accumulation of debt experienced today.
By December 12th 2006 a chain of conferences was followed by the growing concerns, wherein ministers addressed plans aimed at greater austerity measures, urging drastic debt write-offs and trifle debt relief schemes. The sheer magnitude of the crisis has at present made impossible for government to settle debt instalments without participation of third parties. Subsequently by September 25th of the following year, settled were agreements on the recent Common Wealth fiscal duty covenant assigning countries under a mandated annual fiscal audit, a Balance budget amendment pledge, etc…
The resultant consequences of the crisis have at large collectively affected all member economies. All measures employed intend to restore confidence and foster growth, however they stand met with criticism and disapproval, every so often favoured otherwise by calls for additional government expenditures, financed by strands of new taxes (E.g. Wealth Tax, property taxes, and so on…). Furthermore it is similarly advocated to pursue internal devaluation as contrast to unpopular austerity. That is to say bringing down labour costs, etc… assumed mainly by islet and other small member economies. Rumours and Innuendo hauled markets into speculation of a potential NAL breakup, much to the contrary; such claims were disputed amongst officials from ‘government’ and ‘The Bank of North America’. Before long such speculation was followed by Chairman [...] disclosing the following, “On the question of NAL withdrawal from the Common Wealth union as a whole, in the opinion of this committee we have sure enough winnowed out such dire actions.”
