From The Sydney Morning Herald:Fears about Europe's deteriorating finances have intensified as new doubts about the health of French banks - as well as Germany's willingness to help Greece avert default - left investors bracing for another global market downturn this week.
In Greece, the epicentre of the continent's financial disarray, government officials announced new austerity measures, even as the country's Finance Minister, Evangelos Venizelos, warned that the Greek economy was expected to shrink more sharply this year than expected. In a revision, a contraction of 5.3 per cent this year was predicted, rather than the 3.8 per cent forecast in May.
Slower growth could make it harder for Greece to repay its debts, even as it tries to cut government spending and raise taxes.
While the Greek drama has been running for more than a year, only recently has it threatened French and German banks, unnerving investors around the world.
From International Business Times:
A rapid decline in French bank stock prices since the beginning of the summer has led to speculation that the French state may have to intervene and recapitalize its banks, in the same way as the British and other governments were forced to during the first wave of the financial crisis.
BNP Paribas led the falls, with its shares down 13.5 percent, while SocGen and Credit Agricole were both more than 9 percent lower at 1224 GMT. They are trading at levels not seen since at least early 2009, when recession stalked much of the developed world.
Societe Generale said it would cut costs and sell assets to free up 4 billion euros in fresh capital on Monday, although the surprise move failed to stem a sell-off in French bank shares, driven by fears of a Greek debt default........read on
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