France and Germany’s leaders have announced that they have reached an agreement on a plan to help recapitalize Europe’s struggling banks and counter area’s debt crisis.
French President Nicolas Sarkozy and German chancellor Angela Merkel have come to a consensus on a “long-lasting, complete package.” However, they refused to go into any more detail during the announcement.
Instead, the leaders say they must solve some technical issues before bringing the package to the other leaders of the European Union. The pair said they will be presenting the complete package in time for the G20 Summit, which is to be held in Cannes on November 3 and 4.
Neither leader would reveal whether their planned involved using the 440 billion Euro bailout fund to help recapitalize the banks. France, in particular, has supported this movement in the past.
Merkel, on the other hand, has previously favored only using the bailout fund as a last resort if a member of the European Union is unable to handle its banks problems on their own.
Germany and France together make up almost half of the European Union’s total economic output, making the agreement between the two leaders particularly important for the economic future of the region.
Americans, while not directly affected by the agreement, are paying attention to the European’s actions for its effects on our market.
“I think it is important Americans keep a close eye on Europe’s fiscal problems, as they play a key role in how the stock market acts over here,” said junior Journalism and Government and Politics student Chris Leyden. “The problems in Greece are very much worrying investors around the world, and because of that there is instability in the markets.”
While it is hard to predict what will happen in current in our current volatile global economy, many Americans worry that if the European economy takes an even more negative turn, our American economy will suffer as well.
“I am not too familiar with the financial problems in Europe but as an American I am concerned because of how their losses could influence our troubling economy here,” said junior Community Health student Lilai Teum.