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Fundranker Blog—Greek and European Debt Crisis

Greek and European Debt

Greek and European debt weighed heavily on world markets during the first trading week of May. Many financial observers feared that Greece's financial situation could spread to other European nations, possibly setting in motion an even more widely spread downturn in world economies.

European Union nations are tied together with their common currency, the euro, which limits individual members solutions to debt problems, such as Greece’s current situation. Normally, a country would be able to devalue its currency to ease debt problems, but Greece is unable to do that unilaterally.

Paul Krugman, New York Times columnist and winner of the Nobel prize for economics, has a great blog entry today about Greece’s situation and weekend announcments from European Union ministers and the European Central Bank.

World markets have reacted strongly and positively to those announcements in today’s trading. The Nasdaq Composite and the S&P 500 Indexes were up 100 and 45 points, respectively, at 10am today, May 10.

Posted 5/10/10 10:37am ET in Economy, Market