So far, those steps have fallen short, and concerns have mounted among investors that large countries such as Italy and Spaincould fall victim to the crisis, unnerving world stock markets and contributing to fears of a renewed recession.
Analysts see the outcome of Merkel’s meeting Tuesday with French President Nicolas Sarkozy as a sign that no new grand solutions are in the offing. What she called “magic wand” ideas — such as the introduction of a common “eurobond” backed by all 17 nations in the currency zone — are being set aside.
Instead, Merkel is essentially waiting for budget cuts and economic reforms promised in Greece, Italy and elsewhere to take hold, and for new initiatives approved by European leaders in recent months to get up and running. That could take months, if not longer, given the pending legal challenges and required parliamentary action in the 17 member countries — not to mention the time needed for economic reforms to bear fruit."