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European financial markets say goodbye and good riddance to 2011

Major exchanges were up on the day but down for the year
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The twin symbols of the European economies catastrophic 2011: an Occupy protester outside the European Central Bank (Ralph Orlowski/AFP/Getty Images)
Europe's financial markets lost ground in 2011. Next year doesn't look much better as one of Europe's big economies, Spain, tries to halve its deficit by cutting spending and raising taxes
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Spain is back in recession

Economy Minister says Spain has "relapsed" in the last quarter of 2011
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It's a tough job but somebody has to do it. Luis de Guindos arrives for his first day of work as Spain's Economy Minister (PEDRO ARMESTRE/AFP/Getty Images)
Economy Minister says Spain has "relapsed" into recession in the last quarter of 2011. Further contraction is expected next year.
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Europe: Markets easing up

Christmas? or a sense that perhaps the patient has stabilized?
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Santa is smiling in Germany. A respected study of business leaders published today shows optimism for the economy in 2012 despite the euro zone's woes. (Sean Gallup/AFP/Getty Images)
Christmas? or a sense that perhaps the patient has stabilized?
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Spain: sombre times ahead

New Prime Minister Mariano Rajoy tells Spanish Parliament the truth: things are bad and be prepared for them to get worse before they get better
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Mariano Rajoy, Spain's new Prime Minister, just before he addresses Parliament yesterday, looks like he's wondering what mess have I got myself into? (DANI POZO/AFP/Getty Images)
New Spanish Prime Minister Mariano Rajoy says times are tough and they will get tougher
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Spanish Royal Scandal

The son-in-law is not rising as Spanish Royal family try to cut off scandal at the knees
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Iñaki Urdangarin and his wife Princess Cristina on official duty last year. The couple will no longer be given any official duties. (Pascal Le Segretain/AFP/Getty Images)
Spain's King Juan Carlos takes his son-in-law down a peg as financial scandal surrounds the husband of his youngest daughter
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Europe: Thanksgiving? por nada

Euro zone crisis enters new phase as bond markets turn on Germany.
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Chancellor Merkel is constantly under the spotlight but now the glare is growing brighter as the bond markets are beginning to attack Germany. Will this force the Chancellor and her colleagues to change their policy on allowing the European Central Bank to be more proactive in solving the euro zone debt crisis? (HANNIBAL HANSCHKE/AFP/Getty Images)
Thanksgiving in Europe has a hollow ring as the economic crisis inside and outside the euro zone bites
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Spain: no respite from the market

New Prime Minister Mariano Rajoy should be the kind of guy the bond market can do business with: a tax-slashing, regulation crushing, debt-reducing conservative, nevertheless the markets are ratcheting up their attack on Spanish bonds
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The sign at Mariano Rajoy's victory rally says "Thanks." By yesterday he was probably thinking "Thanks, for nothing" when it comes to the bond markets. (PIERRE-PHILIPPE MARCOU/AFP/Getty Images)

At a press conference on Monday, Mariano Rajoy, landslide victor in Sunday's Spanish election, asked the markets for a breathing space as he puts together his new government. Tuesday the markets gave him an answer:


They doubled the interest on 90 day Spanish bonds over the price the country had to pay from last month. Spain now pays a higher rate of interest - 5.11 percent - for this short-term paper than Greece.

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Merkel and Cameron meet: wonder what they will say

Britain wants Germany to loosen the apron strings around the European Central Bank,
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German Chancellor Angela Merkel and French President Nicolas Sarkozy are shown kissing in this advertisement. What are the chances of a photo of Merkel kissing David Cameron ever making it into a Benetton ad? (PATRICK KOVARIK/AFP/Getty Images)
Cameron and Merkel meet to discuss euro zone crisis
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Europe: the wisdom of markets?

When it comes to pricing sovereign debt, can anyone figure out what the bond markets are thinking?
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Campaigners for minority party Equo hold election rally on steps of Bank of Spain in Madrid. Despite likelihood of a right-wing government winning this weekend's elections bond markets drove Spanish 10-year bond yields to record highs today. (CRISTINA QUICLER/AFP/Getty Images)
Do bond markets know what they're doing?
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Europe and the markets say TGIF!!

Greeks have a new government, Berlusconi is expected to go this weekend ... but the euro zone crisis is far from over
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Mario Monti, probable replacement for Silvio Berlusconi as Italian Prime Minister, arrives for Friday's vote in the italian Senate on an austerity package. (ANDREAS SOLARO/AFP/Getty Images)

At the end of the worst week for Europe politically and economically since the fall of the Berlin Wall here's where we are:

Greece's new Prime Minister Loukas Papademos was sworn in and the new PM pledged Greece would do everything required to stay within the euro

Italy's Senate voted through a package of austerity measures the first step in paving the way for Silvio Berlusconi to resign.

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