Last week was the worst for world’s markets in three years and yesterday became known as Black Monday as shares plummeted, but today has been even worse and even the cheerleaders for the euro are now depressed.
The president of European Central Bank, Jean-Claude Trichet, says this is the worst crisis since World War II and requires “unconventional measures.”
When you have a banker of his level, famous for his conservatism and calm, coming out with a statement like that, you understand why there is panic throughout Europe.
The EU Central Bank’s head hoped that the European Central Bank’s (ECB) buy-up of Italian and Spanish debt, which no one wants to touch at the moment, would help the situation, but as we can see on the markets, it is not helping.
This is all bad news for the euro, which has been slumping for the last three years. But the situation for the single currency today is getting even worse, because what the ECB is forcing is making the economies slower and less strong by forcing the countries to slash spending, which leads to creating fewer jobs, stopping investing into economy, infrastructure, in construction and road building.
The number one task for all countries now is to get their economies out into the open and get them growing again, to stimulate people and get them back to constructive work.
These austerity measures are doing the opposite of what should be happening to the euro and this is compounding the problems.
American President Barack Obama has consulted with the heads of Italy and Spain – the latest bail-out candidates – Italian PM Silvio Berlusconi and Spanish PM José Luis Rodríguez Zapatero.
Economists say the US shares a common problem with the EU – unsustainable debt with no feasible resuscitation plans.