The European economic crises continued to compound on Monday with threats of a Greek default coming closer to reality, and European banks holding masses of country debt came under fresh threat.
Markets across Europe are collapsing, fueled by the situation in Greece and rumors that France’s three largest banks — which hold tens of billions of euros worth of Greek debt — may see their ratings cut by a top credit agency this week.
According to The Washington Post, some European banks are trading at bottoms not seen since the worst of the 2008 financial crisis.
The New York Dow Jones Industrial Average, the S&P 500 and NASDAQ fell sharply after the markets opened on Monday with European shares at two-year lows. The biggest issue facing Europeans is the alarming speed at which the economic crisis is unfolding.
The Dow Jones Industrial Average (DJIA) dropped 82 points late Monday morning, in a volatile session and the Standard & Poor’s (S&P) 500-stock index fell six points. By the end of the day Monday, S&P closed at 8 points up and DJIA was up 65 points.
Some experts say that despite European turmoil, markets in the U.S. should remain steady as American investors focus more on problems with their own failing economy. The problems associated with the European crises have been blamed heavily on the inability of the euro to act as a unifying force among the many diverse economies that it represents.
“The euro was conceived to bring a lot of unity to the European markets,” said Randy Bateman, chief investment officer of Huntington Funds to The Wall Street Journal. “[But] they never really built in a fail-safe mechanism. The economies that constitute the European community are just too diverse.”