Germany, Euro | featured news

Germany dismissed a French-led call for euro zone nations to issue common bonds, a day before a European Union leaders' summit which investors are looking to for new measures to counter the bloc's debt crisis.

Recall the reasons for the current euro panic: Greece is getting bailed out and, in return, it’s supposed to cut spending and raise taxes even further. But Greek voters don’t enjoy this austerity and are rebelling against politicians who agree to the deal. So Germany’s now hinting that Greece might get booted from the euro. Disaster, right?

Stocks fell and the spread between Spanish and German bonds hit a record wide, as the prospect of fresh elections heightened concerns about the likelihood of Greece exiting the euro zone.

Investors nervous about the changing political winds in Europe initially drove down the euro and sent stock markets falling across the region Monday morning, though markets were bouncing back later in the day following renewed signs of strength in the German economy.