Oxford Economic Research Institute: It is not entirely impossible for the euro area to experience another sovereign debt crisis.

Analyst Angel Talavera of the Oxford Economics Institute stated that the likelihood of another sovereign debt crisis in the Eurozone is low, but "not impossible." In a report, he pointed out that market concerns about rising French debt and French government bond yields have sparked fears of a possible repeat of the debt crisis in the Eurozone. Although the institutional framework of the Eurozone is still imperfect, the European Central Bank is now a reliable "backstop." However, he emphasized that a major economy like France experiencing serious issues could still cause widespread damage to financial institutions and the overall economy. Talavera stated that the core issue is whether the Eurozone is more prepared than in the past to avoid sovereign debt and financial crises. In short, based on our assessment, the answer is yes. However, a deeper analysis reveals that the situation is more complex, and the outlook is far from optimistic.