Eurozone crisis was started from the Greece & now, Spain is also in Trouble.This two and a-half-year old crisis put in trouble the whole worlds economy.June was the fifth consecutive month that activity across the eurozone has declined, dragging down Germany and France and putting pressure on the European Central Bank to take further action to support the economy.
Eurozone stocks traded lower.
Germany has posted it’s lowest reading in the manufacturing and the service sector in 7 months.France activity declined in both sectors with moderate pace than last month.
Its effect on US : Europe is a trading partner with US and about 2 percent of the US GDP is effected by it. But the perception that is created for US investors is that the eurozone has a significant impact on the company’s prospects.So, US market is over reacted.
Its effect on emerging market : The linkage of eurozone with emerging market is very less and these market is not much more effected by it. There is general malaise, which is keeping investors on the sidelines.
Now, The new government is formed in Greece & it looks for two years more from lenders to meet targets.The delay of the bailout deadline and on extension of the unemployment benefits are key elements of the new government policy document.