FRANKFURT, Germany — Investors have soured on the latest attempt to resolve the European debt crisis.
Stocks tumbled around the world Wednesday, the euro slid to an 11-month low and borrowing costs spiked for heavily indebted Italy. The markets' jitters reflect rising doubts about the deal European Union leaders reached at a summit Friday in Brussels.
The agreement requires the 17 countries that use the euro and nine other EU countries to balance their budgets and gives the International Monetary Fund up to $264 billion to help countries with high debt loads.
But there's growing disappointment that the deal:
• Doesn't reduce existing government debt levels.
• Doesn't do much to promote the long-term growth that would shrink those burdens.
• Doesn't provide enough money to reassure financial markets that Italy and Spain can keep paying their bills.
"Fiscal discipline is needed in the long term, but it doesn't address today's crisis," says Athanasios Vamvakidis, head European currency strategist at Merrill Lynch-Bank of America. "There isn't enough money to stop the run on sovereign bonds of Italy and Spain. Investors don't want to buy their debt."
It was also unclear how the agreement, which is being written into a treaty, would be enforced and whether some of the countries that signed on might end up dropping out because of resistance to budget cuts back home. Britain has rejected the deal.
"Markets like quick fixes and have no patience with the length of the political processes," says Gianni Toniolo, a professor of economics and history at Duke University.
The Dow Jones industrials fell 131 points, or 1.1 percent, to 11,823. The euro traded below $1.30 for the first time since Jan. 12, hitting a low of $1.2973.
European stock markets fell broadly. Germany's DAX dropped 1.7 percent; France's main stock index lost 3.3 percent.
European officials are expected to meet today to work out the details of the treaty.
The treaty will not be signed until March, at the earliest.