
IPFS News Link • European Union
Eurozone crisis: Fear returns
• http://www.bbc.co.uk, Gavin HewittOthers were equally optimistic. The French President, Nicolas Sarkozy, said "I want to tell the French people that the page of the financial crisis is turning. Today the problem is solved."
The President of the European Council, Herman Van Rompuy, was equally upbeat when he said "the turning point in the crisis has been reached". The EU's Economics Commissioner Olli Rehn chimed in with "the risk of explosion is behind us".
Such bursts of optimism now seem foolishly premature. The eurozone is once again rattling financial markets. The main reason is Spain. Its borrowing costs have shot up to close to 6% - levels not seen since January.
The EU had set Spain the target of reducing its deficit to 4.4% this year. The new government in Spain said such a reduction could not be achieved. It suggested 5.8%. After some arm-twisting from Brussels the figure of 5.3% was settled on.