Europe's Debt Still Cause for Worry

Stress tests on European banks were designed to calm the markets, but don’t count on it.

A trillion dollars can buy a lot of peace of mind. That’s roughly what the European Union and the International Monetary Fund pledged on May 9 as a backstop against a Greek sovereign default. At the time, Europe watchers were in a panic that a default this would set off a chain reaction across the region, tipping the world back into recession. But since then, investors have taken questionable news about Europe in stride.

That’s likely to change soon.

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Associate Editor, The Kiplinger Letter