European leaders are scrambling to keep national debt problems in a handful of countries from triggering a new financial crisis across Europe. And investors fear that rising deficits in Portugal, Ireland, Greece, and Spain could trigger problems across the world, so stocks elsewhere have taken a beating. What does this mean for America? (Watch a report about Europe's declining economy)
It's bad news: Crisis in Europe would hurt our exports, "one of the few bright spots in a sluggish U.S. recovery," says Kevin G. Hall in The Seattle Times, but that's not all. It could "drain European governments of resources to stimulate their economies," and a slowdown in the rich euro zone" would hurt the global economy, "thus slowing our recovery further."
"If you think Europe's debt woes are all Greek to you, they're not"
Fasten your seat belts: Europe's troubles have made U.S. markets very volatile, say the editors of The New York Times, sending the Dow Jones Industrial Average briefly below the psychological barrier of 10,000 for the first time in three months. By undermining confidence in U.S. banks, Europe's crisis has made it clear that our own recovery is not a done deal.
"Dow Industrials close below 10,000"
In crisis, there's opportunity: Yes, "the outlook is grim," says Matthew Lynn in Bloomberg, but, as Rahm Emanuel says, every crisis is an opportunity to do things that were impossible before. If the European Central Bank refuses to bail out Greece and the others, organizes an orderly default on their debts, and offers bridge loans in exchange for emergency economic reforms, Europe and the global economy could emerge stronger than before.
"'PIGS' crisis is opportunity for Euro to stand up"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- 10 things you need to know today: September 2, 2014
- What would a U.S.-Russia war look like?
- How American businessmen are ruining American business — and the U.S. economy
- Fall movie guide: All the films you should see in September
- Russia's giant spy ship was a high-tech disaster waiting to happen
- The Obama era is over. The presidency continues.
- America created the Islamic State of Iraq and Syria? Meet the ISIS 'truthers'
- Scottish independence is another financial crisis waiting to happen
- The 10 best networking tips for people who hate networking
- 11 scientific studies that will restore your faith in humanity
Subscribe to the Week