Due to worries over China and Greece, world markets plummeted on Wednesday, as European leaders are set to meet to discuss Greece. Signs from China also tested the anxiety of investors, as the world’s second largest economy looks to be slowing down.
European leaders are in Brussels to meet for an informal dinner on Wednesday night, amid renewed threats to the euro zone union. The leaders will talk about how to increase the growth in the economy in the region and create new jobs. This will be the first summit that Francois Hollande, the new president of France will attend. He campaigned for a shift away from severe austerity cuts in favor of policies that were growth oriented.
European stocks dropped before the so-called growth pact meeting. The FTSE in London was off by almost 2%, The Frankfurt DAX was down 1.7% and the Paris CAC 40 plummeted by 2%.
Greece continues its struggle to form a new government. Tuesday reports from Greece said that Lucas Papademos the former prime minister of the country indicated the country was risking leaving the currency union that caused a sell off over the final hour of Wall Street trading Tuesday.
The euro fell early Wednesday to its lowest level in over 20 months because of the growing risk that Greece may leave. Many analysts feel there is little that can be done to help stop the country’s exit.
Many are worried that policy makers in Europe are looking out more and more for their own interests and that will cause a breakup of the union making the euro’s outlook even worse.