Global Economy, Europe Debt Crisis | featured news

Europe is caught in an economic pincer: slow-growth assaults from one side; fickle financial markets from the other. One obvious way out — the China option — seems barred by geopolitics. There is precedent. Historians blame the Great Depression’s severity in part on poor international cooperation. Economist Charles Kindleberger found a vacuum of power: Great Britain, the old economic leader, could no longer lead alone; and the United States — a replacement — wasn’t ready to help. Is there a parallel today between the United States and China? Are we repeating the mistakes of the 1930s? Unsettling questions.

The United States and China piled pressure on Europe on Saturday to get to grips with its debt crisis before it risks causing bank runs and pushing the global economy into ruinous recession.

The International Monetary Fund is sharply downgrading its outlook for the U.S. economy through 2012 because of weak growth and concern that Europe won't be able to solve its debt crisis.

Italy's sovereign debt rating cut by Standard & Poor's, the latest move in a deepening and continuing European debt crisis.

Stocks are tumbling as investors worry that Greece won't qualify for a new installment of emergency funds in time to avoid defaulting on its debt.

France is ready to do whatever it takes to rescue Greece, the government said, and urged the debt-laden euro-zone member to swiftly implement the July 21 plan to prevent bankruptcy.

After a series of positive announcement from Greek FinMin Venizelos, rumors that Moody's would downgrade French banks and Germany was preparing for a Greece to default send equities tanking, particularly French banks.

Italy and Spain pass new measures as they battle to control their debts while Greece steps up its austerity plans.

The Portuguese government is planning the country's biggest spending cuts in 50 years, a move it described as "unprecedented".

U.S. President Barack Obama and German Chancellor Angela Merkel discussed the eurozone crisis and financial-market turbulence on Saturday and vowed action to bolster the global economy, the White House said in a statement.