Market exuberance for the trillion dollar European Union bailout package waned Tuesday as global markets reconsidered Monday’s gains. The euro, after briefly gaining 2.7 percent on the dollar but closing Monday with only a 0.4 percent gain, fell another 0.7 percent by 8:30 am in New York on Tuesday, with expectations of further losses.
While the availability of emergency funding alleviates the likelihood of an immediate default, countries including Greece, Spain, and Portugal still face the prospect of severe spending cuts to meet required “austerity†targets. Economists also predict that growth in the EU will lag that of the US for the remainder of the year and into 2011.
