Dec. 6, 2011, 2:10 a.m. EST
What happens in Europe won’t stay in Europe
Commentary: From America to Asia, we’re all part of the euro zone now
By Satyajit Das
SYDNEY (MarketWatch) — European summits – more than 20 at last count — have produced little. The planned summit on Dec. 9 may well be the last chance for euro leaders and Euro-crats to avoid financial disaster. Unless European leaders overcome their common sense deficit, as intractable as some budget and trade deficits, this may not end well.
What happens in Europe will not stay in Europe. The shock will be rapidly transmitted through trade, investment and the financial system to the rest of the world. Problems in international money markets will not be welcome for American businesses or the federal government, which relies on foreign investors for financing. It may truncate the nascent U.S. economic recovery.
Not just Americans’ financial health and savings will be affected by what happens in Europe. If the International Monetary Fund (”IMF”) gets involved, Americans will bear around 16% of the bill for any European bailout.
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The U.S. and Europe account for around 40% of world GDP and 25% of its trade. They also make up around 60% of direct investment flows and 60% of financial assets. Europe and the U.S. are each other’s most important market for goods and services.
Full story: http://www.marketwatch.com/story/what-happens-in-europe-wont-stay-in-europe-2011-12-06
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