Investors Brace as Europe Crisis Flares Up Again
By LIZ ALDERMAN and NELSON D. SCHWARTZ
September 11, 2011
Fears about Europe’s deteriorating finances intensified on Sunday as new doubts about the health of French banks, as well as Germany’s willingness to help Greece avert default, left investors bracing for another global stock market downturn this week.
In Greece, the epicenter of the Continent’s financial disarray, government officials announced new austerity measures on Sunday, even as the country’s finance minister, Evangelos Venizelos, warned that the Greek economy was expected to shrink much more sharply this year than previously anticipated. In a revision, a contraction of 5.3 percent in 2011 was predicted, rather than the 3.8 percent forecast in May.
Slower growth could make it harder for Greece to pay its debts, even as it tries to reduce them by cutting government spending and raising taxes.