Gordon Brown calls for European “Early Warning System” for debt alerts

Oct. 15, 2008 - PRLog -- The current “Credit Crunch” has cost European governments almost €2,000,000,000,000 in bail-outs of banks and other financial institutions. The scary amounts that are now needed just to try and keep our economies on track could still grow as there is no guarantee that the plans will halt the current meltdown. The hope is of course, that a degree of confidence will return and finance will become somewhat freer allowing businesses to start trading more openly.

The current squeeze has already started showing by way of the lengthening unemployment queues. As the situation worsens (if it is allowed to) millions could potentially end up on the “Scrap-heap” as companies fold and order books are closed. The coming times will be trying for all of us, but the hefty investment now is surely an easier pill to swallow than what might otherwise ensue!

If the grip of the economic slide is allowed to tighten still further, many of our established household names could simply disappear forever. Nobody seems to be immune from its grip. Even the ultra rich still have to have somewhere to keep their money or something to invest it in, but must be worrying now about where it might be safe? Under the mattress is hardly an option!

In order to overcome the current crisis we will all need to pull together for the common good. Debt is not always bad, but as we have now seen in glorious technicolour, unchecked, escalating and un-repayable debt is a disaster waiting to happen, whether it be “Joe Public” or a private investment bank, the same principles apply; the only difference being the balance figures!

It is very rare for any individual or business to go through life without ever getting into debt of some form or another. When facing the prospect of taking any form of debt, we all need to consider whether it will be easily affordable to repay it without overstretching our current budget, taking into consideration factors such as seasonal anomalies, down-time, holidays, other non-productive periods, unexpected expenditure needs etc.

It seems that everyone (governments included) have looked only at the maximum availability of funding, with almost no regard whatsoever over how to meet the payment commitments. Everyone needs to budget and do so in a realistic and honest way. Perhaps as some have suggested, there should be inclusion of debt avoidance and finance management on the school curriculum.

One thing is certain in an uncertain world; we can NEVER allow the current situation to be repeated.

If you are affected by any of the issues discussed in this article or anything relating to personal debt, please visit our website at; www.sterlingtrust.org.uk

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