Tuesday, October 18, 2011

Fear returns as Germany warns of "no miracle cure" for Europe debt crisis

Global stocks have taken a hit this morning after Germany's finance minister warned there'd be no miracle cure for Europe's debt crisis.

The comments have dampened hopes that Eurozone leaders will hammer out a comprehensive solution when they meet at the weekend.

The reality check pushed investors back to the sidelines, and the Australian dollar also fell.

Worried investors have been grasping at any sign of optimism that Eurozone leaders might get their acts together especially after the German chancellor Angela Merkel and French President Nicolas Sarkozy said the weekend summit would offer a comprehensive solution

But this morning, Germany's finance minister Wolfgang Schaeuble said while there would be a five point plan, no one should expect a miracle cure or a definitive solution

That's done nothing to ease concerns about European banks, as a result stocks fell around 1.6 percent across Europe

The renewed fear saw investors dump the Australian dollar from last night's high of 103.7 US cents to a low of 101.49 US cents this morning.

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