We always wish for good things when things start going wrong. Same thing was expected by other countries about their economies when US financial panic started. They wished that the financial crashes shouldn’t influence their markets. Even it appeared that the impact of the recent financial panic and ongoing economic downturn might be largely contained to U.S. consumers, businesses and government leaders. But things started changing slowly. Of course the impact appeared immediately in some countries which relied on US markets. Now its time for other countries, which were thinking that their markets are fine. US financial panic started going global. The immediate impact is being felt by exporters, who have enjoyed something a revival in the past few years as a weak dollar and higher productivity made their products more competitive around the world. But those importers also relied on credits. Exporters face their home-grown problems associated with lack in credits. Now the credit squeeze works out pulling back all the trade related businesses.
European Central bank has been holding its interest rates at relatively high levels to fight inflation, but now as European economy slowing down, European rate cut is looking much more likely to happen. Low rates had a powerful impact on markets.
Some economists suggest that if financial panic can be contained and the collateral damage minimized the recovery could come sooner than the current turmoil might indicate.