European Financial Crisis Deepens

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Money Magazine Hoss is alarmed by the deepening financial crisis in Europe. The Euro is under serious attack and slummed to a 14 month low last week following its biggest weekly decline since Oct. 2008 (4.3%).

On a positive note European finance ministers are meeting in Brussels today to tackle this problem head on. Among those attending are Belgium finance minister Ddier Reynders, Luxembourg finance minister Luc Frieden,Austrian finance minister Josef Proell,French economy minister Christine Lagar ,Swedish finance minister Anders Borg, Dutch Finance minister Jan Kees de Jager, British finance minister Alistair Darling,Finnish finance minister Jyrki Katainen and Spanish economy minister Elena Salgado.

It is clear that this European financial crisis has had negative impacts on the world wide financial markets. Even the Group of Seven finance ministers (Canada, France, Germany, Italy, Japan, United Kingdom, and United States) held an emergency conference call following which they urged their European counterparts to adopt a clear, timely and strong response.

The bond markets in Greece, Portugal and Spain are under serious pressure as interest rates continue to rise.The problem here of course is that unlike North American countries which have individual currencies the Euro is spread over many countries and therefore Countries like Spain, Portugal and Greece cannot devalue their currency to stabilize their economy. They must rely on aid from their Euro counterparts. For example, to date nine countries have signed off on a 110 billion-euro aid package for Greece. But what happens in Greece if this aid package falls apart. Germany (the largest contributor to the aid package) had to overcome a court challenge, which fortunately, was rejected by Germany's highest court.

Money Magazine Hoss hopes today's conference in Brussels will have the desired effect and calm the financial markets, last weeks huge swings are not easy on one's blood pressure.

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