The risk of debt

The Herald reports:

The Government could face rising costs of borrowing and increased scrutiny of its debt as a result of the sovereign debt crisis in Europe, a global fund manager has warned.

Gerard Fitzpatrick, a bond portfolio manager for Russell Investments, said Europe’s €750 billion ($1.3 trillion) bailout had stopped the immediate liquidity crisis but there were still concerns about sovereign debt. …

However, he said there was a risk of debt being repriced which could make it more expensive for the Government here to borrow money internationally.

“That will put more pressure on the New Zealand budget.”

Maybe this may cause a bit of hesitation in the economic geniuses in Labour who demand that the Government increase its level of borrowing, so it can put more money into the Cullen Fund.