Europe’s leaders might be on holiday but in the City of London it was business as usual on Friday.
European markets were down at the end of Friday trading amid investor worry over the continent’s debt crisis.
Analysts say the EU needs to take decisive action to restore market confidence.
Derek Halpenny, European head of global currency research at Bank of Tokyo – Mitsubishi UFJ, said Europe must “act quickly and reassure the markets by indicating a willingness to increase dramatically the size of the EFSF (European Financial Stability Facility).”
The EFSF fund was designed by EU policymakers to shore up the economies of heavily indebted euro zone countries.
Lloyds Bank analyst Charlie Diebel, who heads market strategy for the lender’s research sales and derivatives structuring unit, said there would be no quick fixes to cure Europe’s economic woes.
He warned that tackling the eurozone’s debt crisis would be “a very long term process.”
“You’re talking about restructuring economies, and that is multi-year….you’re not going to have problems suddenly go away.”
“The best that European politicians can hope for is to get a sufficient package and sufficient agreement on all of the different issues that they manage to stabilise the markets and stop this contagion getting worse.”
But it appears that fear has far from evaporated and traders are bracing themselves for a summer of discontent.