Source:
Globe and MailROME — Europe is on tenterhooks.
Only a few weeks ago, there was a sense of optimism in the euro zone. Yes, the economy was cracking, but the worst seemed to be over. Oil prices were down, wage settlements were up. Apart from Spain, Ireland and Britain, which is not a euro zone member, property prices were holding their own.
Then came the Wall Street disaster, and pessimism returned with a bang. Europeans had assumed they would be largely immune to the American financial crisis. Not any more. Economists now expect another quarter or two of negative growth. They say interest rate cuts – the European Central Bank (ECB) raised rates in July – and economic stimulus packages are all but certain.
Economic recovery, in other words, has been put on hold. And there's a potential monster stalking the euro zone: fear of a bank collapse.
Read more:
http://www.reportonbusiness.com/servlet/story/RTGAM.20080925.wrbankseurope26/BNStory/Business/home
This Christmas the whole world will be united at long lines at banks...