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Euronews.net - A black Monday for the financial markets with share prices and the euro tumbling in value.
As well as fears of recession, investors are worried about the euro zone’s ability to solve its debt crisis and legal moves in Germany to prevent Berlin contributing to EU bailouts of Greece, Ireland and Portugal.
In Frankfurt, where the share index hit a two year low, down over five percent, analyst Oliver Roth, Close Brothers Seydler Bank was gloomy: “We know more economic data will be released this week, and the debt crisis will be joined by a new friend called recession. And this it what hits the market and, of course, means a lot of problems.”
Another analyst, Robert Halver of Baader Bank, said: “We still have a political crisis, in the US as well as Europe. More and more voices in Europe and within the German government saying Greece shouldn’t be a member of the euro zone any longer. So, we can expect some major political mud-slinging over this issue and not many positive things this week – no clarity at all.”
The only reason that Wall Street was not also deep in the red on Monday was that the US stock markets were closed for a holiday – Labor Day.
But it is unlikely that US investors would have been in a more positive mood given the dreadful US jobs figures released on Friday that boosted concerns that the world’s biggest economy is slipping back into a recession.
European bank shares were hammered because of the losses they face over money they have loaned to euro zone governments and a multi-billion-dollar US government lawsuit accusing some of them of misrepresenting the value of subprime mortgages.
Deutsche Bank fell 8.3 percent, extending a decline from Friday.
The region’s banks have lost a third of their value since this time last year.
The recession fears pulled down oil prices while so-called safe havens – the Swiss franc and gold – rose.