Thread: Economic crisis spreads through Europe

Economic crisis spreads through Europe

BY HELEN KENNEDY
DAILY NEWS STAFF WRITER

Monday, October 6th 2008, 3:06 AM

Food hoarding in Iceland. Banks teetering in Germany and Italy. Emergency summits in Paris.



The credit crisis that's already knocked over a dozen Wall Street institutions is ricocheting across the Atlantic amid growing fears of a global recession.

The $700 billion bailout bill President Bush signed Friday is supposed to persuade banks across the world to start lending again.

But the mood on Wall Street was grim going into what promises to be another tough week.

In more banking turmoil, Wells Fargo and Citigroup were fighting over beleaguered Wachovia. Wachovia said it would ignore a judge's order to halt plans to sell itself to Wells Fargo.

At an emergency economic meeting in Paris over the weekend, the leaders of Germany, France, Italy and Great Britain could not agree on a plan to halt the European meltdown.

The French proposed a multibillion-euro bailout through the European Central Bank, but the Germans balked.

Germany, Greece and Ireland have had to guarantee all private deposits to stave off bank runs.

Four big European financial institutions had to be bailed out by their governments last week. The German government announced a $69 billion bailout of Hypo Real Estate Holding, while the sprawling Italian-based UniCredit was fighting speculation about its solvency.

In Iceland, where the currency went into free fall last week when the government nationalized a major bank, there were reports of runs on groceries after a supermarket spokesman said there wasn't enough foreign currency to import more food.

hkennedy@nydailynews.com