European Economic Woes Could Prolong Worldwide Downturn

Worries about the stability of the European economy sent worldwide markets into a slide Thursday and fueled worries that the Euro zone's struggles with debt could affect the rest of the world, the New York Times reports. The Dow Jones dropped 2.61 percent yesterday, dipping below 10,000 for the first time since November. Stocks across Europe slumped as much as 6 percent, driving the euro down to its lowest value against the dollar in seven months.

While some countries, including Germany and France, have acted quickly to help their economies recover from the global recession, others, such as Greece and Portugal, are seeing the consequences of profligate spending as they now struggle to pay off mountains of debt. If they default, the consequences could be felt deeply in Europe and prolong the economic downturn in American and Asian markets.

The financial troubles of some European nations have ignited a debate, mostly unnoticed by Americans, about the value and future of the European currency. There are rumors that countries with stronger economies could come to the rescue of nations like Spain, which is saddled with 19 percent unemployment and loads of debt after an American-style housing bust. If not, economists worry that a ripple effect could impact the entire globe.