Concerns over the European economy and the debt situation in Spain and Italy has roiled the markets substantially over the last few days. These factors combined with lackluster jobs growth on Friday are raising borrowing costs for the periphery of Europe, and have caused steep market declines particularly in Europe. While profit taking is certainly well deserved, the situation in Europe remains worrisome until they address the structural problems that exist. Either they need to adopt a unified fiscal policy or the single currency does not make sense. Unfortunately policymakers seem to require the markets to reach a frenetic panic before they take substantive new action, and the recent market rally has perhaps caused policy makers back to their laissez-faire attitudes.
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