European policy makers have avoided a financial crisis by flooding the market with cash, but they haven't addressed economic hardship on the ground, Kelly said. In granting Cyprus' emergency rescue, for example, lenders demanded economic reforms, debt payments and a banking overhaul that will result in heavy losses for bank bondholders and shareholders. In addition, people with more than 100,000 euros in their accounts will lose up to 40 percent of their deposits.Kelly said that's tough to swallow for people facing high unemployment and government cutbacks in Greece, Italy, Spain and other countries that received bailouts.
US Stocks Fall On Broad Concern About Europe
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