The 2010 Euro crisis, also known as the Aegean Contagion developed early this year in some countries in Europe including Greece, Spain and Portugal. The crisis was caused by the inability of these countries to repay their debts. This led to a crisis of confidence between the countries concerned and other EU countries, especially Germany. The downgrading of the European Government debt and concern about rising government deficits and debt level has led to panic in financial markets. The Eurozone countries and IMF agreed to jointly provide a €110 billion loan for Greece, on the condition that it enforces harsh austerity measures.
[...] The fall of the euro was precipitated by fears about the long-term sustainability of the common currency in the face of current government debt levels, as well as by lack of market confidence in Europe's recovery. The European economy is reportedly facing years of chronic unemployment and nearly stagnant growth. These factors combined with rumors that Arab, Russian and Chinese governments are reviewing their euro holdings, is causing a deepening of the crisis. Even European funds are looking to safeguard their investments elsewhere. [...]
[...] According to Jon Markman, the new world order that has emerged from the speculative excesses, recessionary realities and regulatory breakdowns of recent years has created a world of lucrative new profit opportunities - that are governed by a new set of profit rules. In terms of this paradigm of new rules and new profit opportunities, the crisis could end up as a net positive for U.S. stocks. Although it was predicted that the U.S. companies would be adversely affected by the debt and corporate growth troubles in Europe and the developed economies of Asia, it has been noted that share prices in those regions of the world have actually risen. [...]
[...] Germany, and China are export powerhouses, that are already running a large trade surplus with the U.S., and the Obama administration has been encouraging Berlin to maintain government support to increase domestic consumption, especially since weaker nations in the European Union are pulling back. "Not only are they not going to expand demand, they're going to continue with fiscal austerity and if anything they're going to reduce demand," said Kirkegaard. He predicts that France is likely to follow suit with its austerity measures to keep pace with competing economies. [...]
[...] And a weather-related jump in energy generation is expected to add to industrial production Based on these developments, Richard Berner - the co-head of global economics and chief U.S. economist at Morgan Stanley, revealed that his economic models suggest that the pace of economic growth may quicken in the months to come. According to Berner, "incoming data portray a robust economy, an acceleration from a pace of growth in Q1 to a annual clip in Q2 even as consumer spending decelerates . [...]
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