Spotlight falls on Europe’s stuttering economy

FRANKFURT: 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 eurozone and Germany, which has just narrowly avoided a recession.

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

“The eurozone is the best part of 20 per cent of the global economy,” James Knightley, an economist with ING said.

“The longer the stagnation goes on the more Japan-like it becomes.”

The eurozone’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 monthly barometer of sentiment, due on November 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 conf lict that has killed more than 4,000 people.

German Chancellor Angela Merkel said at the G20 leaders’ summit in Brisbane that the European Union was considering further financial sanctions against Russian individuals because of the crisis. — Reuters