NEW YORK (ForexNewsNow) – As the earthquake caused by the US debt crisis continues to shake global markets, Europe continues to face financial tremors of its own. The euro lost ground on Wednesday morning following the debt crisis meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel in Paris, which did little to reassure markets. Analysts across the board were underwhelmed with the outcome of Wednesday’s meeting and claim that the meeting did too little to restore confidence to the volatile European markets. At 6:00 A.M. GMT this morning, the euro was sinking against the dollar, trading at 1.4402, and was also decreasing against the yen, which was trading at 110.42. Facing mounting pressures, including a near crash of the stock exchanges last week, French President Nicolas Sarkozy and German Chancellor Angela Merkel attemped a show of unity on Tuesday in order to submit a range of new economic measures to help the Euro Zone’s struggling economy. The new economic measures included economic governance of the Euro currency bloc, fiscal “golden rule”, tax on financial transactions, fiscal convergence among EU countries. The proposals were welcomed with relief by governments, but many analysts say the measures are not enough to calm the volatile markets. Despite the idea backed by Italy’s economy minister Giulio Tremonti that the Euro Currency bloc should create its own “Eurobonds” to prop up the flagging economy, Chancellor Merkel stated that Eurobonds would not be useful and would not be introduced at this stage of the crisis. In response to the decision as analyst from Wells Fargo noted that “Investors had heavily focused on this proposal… as long as it will be rejected, it will be difficult for leaders to impress the market,” said the analyst. Both French and German leaders have also rejected any idea of ​​increasing funds of the European Financial Stability Facility (EFSF), considering it “sufficient”, yet this was another disappointment for many traders who expected a new decision on this point. The euro also suffered from the disappointing release of the German GDP on Tuesday. German Gross Domestic Product grew by only 0.1% during the second quarter while analysts expected a rise of 0.4%. “The Franco-German meeting did not result in clear solutions and this has caused the sale of euros,” commented Nobuyoshi Kuroiwa, a foreign exchange analyst at Hachijuni Bank. “I fear that the euro might fell at $1.41 within a week. The dollar is also weak, and therefore quick changes in this currency pair will continue,” he added.

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