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Europe is changing. Here's how. A reported blog.

European financial markets say goodbye and good riddance to 2011

Major exchanges were up on the day but down for the year
2011 byebyeEnlarge
The twin symbols of the European economies catastrophic 2011: an Occupy protester outside the European Central Bank (Ralph Orlowski/AFP/Getty Images)

Europe's big two stock exchanges only traded for half a day today - it's still the holidays here. London's FTSE 100 closed at 5572.28, more than three hundred points lower than a year ago, when the last session of 2010 finished at 5899.94. Frankfurt's DAX ended 2011 at 5898.35, down more than a thousand from 2010.

Other trends as the global economy's annus horribilis comes to an end: Dollar is confirmed as the safest haven. Gold is losing value as investors liquidate holdings and pile into the dollar, according to the FT.

Meanwhile, Spain looks like having a very tough 2012. The new conservative government of Mariano Rajoy presented details of its budget for next year today.

The headline is that Spain's deficit is currently 8 percent of GDP (it had previously been estimated to be 6 percent of GDP). Rajoy is pledged to reduce the deficit by almost half - to 4.4 percent - by the end of 2012. There is only one way to do that: cut spending and raise taxes. The government announced 8.9 billion euros in cuts ($11.5 billion) and 6 billion euros ($7.8 billion) in tax increases aimed at Spain's wealthiest citizens. Details of both cuts and tax rises were not announced.

The likely effect on the Spanish economy's biggest problem - an unemployment rate now over 22 percent - cannot be gauged until the details are made public.