World leaders challenge Europe over debt crisis

Concerned about the continually growing European debt crisis, world leaders are calling for euro zone leaders to do more to prevent financial collapse.

LOS ANGELES, CA (Catholic Online) - Europe's financial worries have been impacting world markets for a long time, but as the European debt crisis lingers those markets continue to stagnate. This is particularly apparent in the U.S. where  a slow and fragile recovery from recession is underway. Recent market volatility in the U.S. has been blamed on European fears.

Analysts have warned that the European debt crisis could have a greater impact than 2008's panic. Of particular concern is Greece, which many see as the most likely nation to default on its obligations. The Greek economy remains battered with high unemployment, exacerbated by severe and unpopular fiscal austerity measures. 

A lot hinges on Greece. The Greek government is due to implement a series of fiscal reforms aimed at ensuring they can repay money borrowed to prevent default. So far, the Greek government is yet to make the agreed changes. Upon those changes, the next round of  bailout money for Greece rests.

If Greece does not make the promised reforms, or if they still default, the result will be a financial domino effect as banks and investors lose fortunes. The impact will spread around the world as larger banks, reliant on Greek payments, fail. 

In turn, other governments could default and investors could pull money out of markets already teetering on the brink of recession.

Fear of this has almost brought this financial nightmare to pass. Earlier this month, alarms were sounded as U.S. investment in Europe sharply declined. 

Into this mix, international leaders are encouraging Europe to step up and ignore what is a very real risk for their own economies. But for European leaders who must stake their own money and authority on the matter, that is a challenge much easier said than done. 

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