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What the European debt crisis means for you

UK banks are currently owed hundreds of billions of euros by the countries currently at the centre of the European debt crisis. France owes British banks €227 billion, while Ireland, Spain, Italy and Portugal owe €104.5 billion, €74.9 billion, €54.7 billion and £18.9 billion respectively, according to data from the Bank for International Settlements. Greece, the leading protagonist in the debacle so far, has borrowed a relatively modest €9.4 billion from UK lenders.

Although the countries involved may seem far removed from the UK and the numbers trotted out almost meaningless by dint of their length, we as a nation could be severely affected by what pans out in the eurozone over the coming weeks and months, despite the fact we’re not even in the single currency. If our banks don’t get their money back, the financial meltdown of 2008 could well be eclipsed.

But what does all this all mean for you? It’s all very well arguing the toss over whether countries like Greece or Portugal should ever have been allowed to join the euro in the first place, or how quickly the crisis will plunge the region – and Britain – back into recession. It’s almost guaranteed that the crisis with hit growth in the UK over the coming years and have a severe effect on our trade with our European partners. But you already know all this, and it doesn’t directly affect you. You want to know how the crisis is going to hit you in the pocket. The truth is, it probably already has.


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