Spotlight falls on Europe's stuttering economy

Sun Nov 16, 2014 3:07am EST
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By John O'Donnell

FRANKFURT (Reuters) - As large parts of Europe's economy grind almost to a halt, attention will focus this week on the latest assessments of business confidence in the euro zone and Germany, which has just narrowly avoided a recession.

While the United States economy has accelerated and China holds a slower but steady course, euro zone countries have remained sluggish, with overall growth in output slowing to a trickle.

"The euro zone is the best part of 20 percent of the global economy," James Knightley, an economist with ING, said. "The longer the stagnation goes on the more Japan-like it becomes."

The euro zone's problems have raised expectations that the European Central Bank is preparing to loosen its purse strings further to try to rekindle growth.

Against this backdrop, Germany's Centre for European Economic Research's (ZEW) monthly barometer of sentiment, due on Nov 18, will provide more insight into business confidence levels.

The Ukraine crisis is a major drag on business and investor sentiment, especially as there have been new reports of Russian troops pouring into eastern Ukraine.

Russia has denied sending military forces to help separatist rebels in that region launch a new offensive in a conflict that has killed more than 4,000 people.

German Chancellor Angela Merkel said at the G20 leaders' summit on Saturday in Brisbane that the European Union was considering further financial sanctions against Russian individuals because of the crisis.   Continued...

A euro logo sculpture stands in front the headquarters of the European Central Bank (ECB) in Frankfurt October 26, 2014. REUTERS/Ralph Orlowski