(NEW YORK) — Austerity measures in European countries are under fire, but there are no easy choices for the debt crisis many large European economies are embroiled in. As a result, markets in Frankfurt and Paris closed down about 3 percent Monday. London’s FTSE was down nearly 2 percent.
The fortunes of the cereal company Kellogg give us a sense of the impact Europe can have. The company cut its earnings outlook Monday. The CEO said in a statement, “we faced more significant challenges in both Europe and in some categories in the U.S. than we expected.” Fewer Frosted Flakes and Pop Tarts sold in Europe means the company stock is being hammered, down more than 5 percent.
U.S. markets are also lower, though the Dow is off the worst of its lows so far Monday.
About this time last year the U.S. economic recovery began weakening and the European crisis began to negatively impact global markets. Europe’s crisis can affect the U.S. because:
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Jethro Mullen Ivana Kottasova and Patrick Gillespie, CNN
Cristina Alesci Seth Fiegerman and Charles Riley, CNN
Ahiza Garcia, CNN
Brian Stelter, CNN Money