After a week of turmoil on the European financial markets, France, Italy, Spain and Belgium have decided to ban short-selling on the shares of banks and other financial companies.

­Short-selling is a practice allowing traders to profit from betting on falls in share prices. It has been blamed for increasing recent market instability.

Jan U. Hagen of the European School of Management and Technology believes that the new short-selling ban will not do much to restore market order and confidence in Europe, but is rather a sign of fear that the financial crisis may deepen even further.

“I think [the ban] shows that the officials are very nervous at the moment and they are trying to break this downward spiral that banks have been into lately,” he told RT. “My fear is that we see some short-term improvement in the share prices, but as the fundamentals are seen rather gloomy in the market, I think, overall, we will see a continued downward trend.”

Hagen notes that short-term liquidity measures are not the way out, but structural reforms are.

“The solution is definitely not concentrating on short-term liquidity measures, like the European Rescue Fund,” he said. “I think it’s much more important to concentrate on structural reforms, and that means brining down debt levels to sustainable level, and so far we have not seen this. What we’ve seen is this kind of hectic crisis management and this hectic communication from the European Central Bank, which, basically, says that everything is under control. But all that you see is panic management.”