Investors Fear EU Bailout Spells Financial Meltdown

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BRUSSELS, Belgium -- Investors worldwide have been showing their concern over the European Union's bailout of Ireland. The EU hopes the measure keeps the debt-ridden country from falling into financial crisis.

But not everyone is happy about the European Union's proposed bailout of Ireland.

In fact, EU and Irish officials may be the only ones pleased with the deal. Irish workers don't think the plan punishes banks and the wealthy, and they worry about the coming budget cuts to the welfare state. Many economists don't like it, because they doubt it will stop the debt crisis from spreading throughout the EU.

Also, the interest rate on the loan is so high that one economist called it "a ransom note." Another called it "extortionate".

The currency market voted against it, sending the euro to a two-month low on Monday as investors fled to the safety of the dollar and U.S. treasury notes.

"You do not solve a debt crisis by pouring more debt in," explained Jeremy Batstone-Carr, British analyst. "Ultimately it's a bit like giving an alcoholic another drink. It will not, in itself, prevent problems elsewhere on the periphery of Europe."

Analysts have been predicting the end of the European Union ever since it's conception, but it has weathered several crises and done just fine. However, with several national economies in play, this time it's different.

Even the rich nations of Europe have too much debt. The low-ball official figure is three quarters or more of their Gross Domestic Product or GDP.

The euro, which was supposed to bring Europeans together, now seems to be sowing division and nationalism among European countries. Taxpayers from one nation don't like bailing out other nations. A number of economists believe that for the long term, it will not remain in its current form.

"I think its true that in the next 5 or 10 years the euro will not look like it does right now," said economist Cecile Philippe. "So what it will be is very difficult to predict, but it will be a weaker currency, that's for sure.

There's fresh concern that the debt problems of Ireland, Spain, Portugal and Greece could turn into an EU-wide financial meltdown.

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