Shocked European ministers are preparing for emergency talks to shore up the euro after markets fell in reaction to panic measures in Germany.
Angela Merkel stunned EU capitals by warning that the euro was in danger and triggered fears of a fresh financial meltdown by announcing a ban on risky trading practices by speculators. The German Chancellor’s actions opened up new cracks in the single currency, drawing sharp criticism from France and prompting Brussels to issue an appeal for unity.
Shares in London plunged by nearly 3 per cent, with similar falls in Paris, Berlin and Madrid. The euro plummeted to a new low against the dollar before making a slight recovery.
European finance ministers, who have just hammered out a massive rescue plan for Greece, will hear controversial calls from Germany at a meeting tomorrow for changes to the Lisbon treaty to give Brussels powers to co-ordinate national budgets.
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Related:
Euro slumps as ‘wolf pack’ hits world’s markets in response to Merkel move
Quitting the euro club is no longer unthinkable
Asia funds bet against the faltering euro as investors lose nerve
Updates:
3:47 pm EDT, May 20th, 2010 — Behind the drama in Europe lies a global crisis
3:49 om EDT, May 20th, 2010 — Germany’s ‘desperate’ short ban triggers capital flight to Switzerland
3:50 pm EDT, May 20th, 2010 — Merkel sticks to her guns, calls for global market reform
4:03 pm EDT, May 20th, 2010 — Stocks to Tumble Another 20%, Cash the Safest Place: Roubini
The great EU experiment is exploding. Unfortunately, no one listened when the few voices urged these countries to trim their social services, entitlements and immigration policies. We may enter a world wide depression yet.
Europe is the canary in the coal mine of Socialism. Next we’ll see the EU begging to get into Turkey to save its sorry hide from excessive socialism.
Let’s hope that it is becoming clear to progressive Canadians from watching the canary go down the shaft that what they really don’t need is Iggy and National Day Care run by CUPE.