This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

After 3 Bumpy Years, Europe Turns Corner On Crisis

German Chancellor Angela Merkel has also helped ease financial tensions across Europe by speaking more forcefully about the need to hold the euro together.

Merkel's support is critical because Germany, the eurozone's largest economy, has the most at stake financially in any bailouts. Merkel has backed the ECB's bond-buying plan and has made conciliatory statements toward Greece.

That has paved the way for the so-called troika of international lenders â¿¿ the ECB, the European Union and the International Monetary Fund â¿¿ to allow Greece more time to meet deficit-reduction targets. The Greek Parliament took a big step Wednesday toward securing its next batch of rescue loans from the troika by approving a new round of tax hikes and spending cuts.

Another key breakthrough in the financial crisis came in late June, when leaders meeting in Brussels took new steps to steady banks and governments. They agreed to ease up somewhat on austerity demands; to use bailout funds to buy government bonds and help ailing banks; and to create a single supervisor for all of Europe's banks.

Some analysts worry that as the financial pressure eases Europe's leaders could lose their recent momentum.

A breakup of the euro "is still possible," says Marie Diron, senior economic adviser to Ernst & Young. "I don't think we have removed the risk altogether."

Europe's leaders have big challenges left.

The most pressing is saving Greece. If the country was forced into a default and began printing its own currency, investors would assume other countries might go next and begin pulling their money out of those countries too, or demand higher returns to keep it there. The coming months could severely test Germany's new willingness to help. Despite two bailouts totaling ⿬240 billion ($311.3 billion) since 2010, Greece needs an estimated ⿬30 billion more from the other eurozone countries as its economy shrinks.

3 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs