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Europe Fatigue Hits Wall Street

 December 07, 2011 12:53 PM


Anyone who has ever spent a long vacation in Europe knows the symptoms. What started as charming sites so different from home that they begged to be explored become more run down castles and cathedrals and yet another museum to be slogged through. Excitement gives way to fatigue and the thought of another walled city, important work of art or historic site makes one yearn for a Big Mac and Coke.

American investors are feeling their own version of euro-fatigue this week. For months, U.S. indexes have dipped, or dived, on news that Greece, or Italy, or Spain or some other European Union member country is facing sovereign debt troubles. Then the indexes rebound because this time European Union leaders, typically located in Germany or France, have a plan. Then the plan falters, or another country faces troubles, and the cycle starts over.

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This week, investors have been treated to a continuous series of announcements and leaks in advance of Friday's big EU summit. But markets aren't reacting with great enthusiasm because it appears investors and market watchers are outright skeptical that this go-around will be any different than the numerous earlier go-arounds.

Reportedly, German Chancellor Angela Merkel and French President Nicolas Sarkozy are ready to get tough with the other 25 EU member nations. The plan they are putting together, according to leaked documents and statements, will require fundamental changes to the EU treaty so that troubled members can be dealt with quickly. For example, rumor has it that the two are calling for automatic sanctions on EU nations that have debt exceeding 3 percent of gross domestic product.

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Here in the U.S., experts are hopeful but are wondering if they've seen this particular scenario before. They want proof that this time things are different before putting down their Big Macs and Cokes and getting ready to see yet another site.

 

 

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