The European Union has staved off a meldown for now.
December 12, 2011- On Monday, financial markets across Europe and Asia reacted negatively to the European Union’s landmark deal. European stocks were pushed lower and the euro lost value as many investors felt the sovereign debt crisis would get worse.
On Friday, all countries in the EU agreed on the deal with the exception of Great Britain. The deal was to pursue a stronger fiscal union, provide strict budget regulations and provide the International Monetary Fund loans of 200 billion euros to help defeat the debt crisis.
Many analysts said the European Central Bank was not ready to dictate stronger action that many feel is necessary to stop the crisis. One banker said, “Yes there is a plan in place that will help with the long term, but it does not help in the short term.”
The euro dropped nearly a half percent early Monday and is close to six percent below its peak of October and over ten percent below its high of 2011 in May.
Moody’s Investors Service will look at all the ratings of nations in the EU during the first quarter of next year. It reported that since no short-term measures were put in place the region could be prone to additional debt problems.
Friday the agency reported that the crisis was still at a very volatile and critical stage.
