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Doubts mount as Europe struggles with next steps in euro crisis

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"A lot of the excitement over the treaty has given way to other realities setting in … we are now in an ‘Oh, but…’ moment,” says Sony Kapoor of the Brussels think tank Re-Define. “[European leaders] had nothing to say about growth, and we are still staring at a deep recession that will worsen the debt crisis.”

As Europe’s third-largest economy, Italy faces huge ($220 billion) debt repayments by March and popular anger over austerity. New Prime Minister Mario Monti vows a new budget will quiet markets. (This week, Italy’s 950 members of parliament, whose salaries are double that of their German and British counterparts, debated pay cuts.)

French officials continue to brace for a possible loss of the nation’s AAA rating, even as Fitch Ratings forecast a “significant” downturn in the eurozone and Moody’s put eight Spanish banks on review for a downgrade.

French Socialist presidential candidate François Hollande says the fiscal union concept agreed to last Friday by 26 EU members – Britain did not join in –  to tighten fiscal discipline, lacks a significant growth component, and vowed to renegotiate it if elected next spring.

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