EURO ZONE

摘要

Slipping Further into Recession Economic news continues to be weak. After contracting by 0.3%(q-o-q) inQ4 2011,GDPwasflatinQ1 2012, but Q2 data suggests the recession is deepening. French and German production contracted in April while May Euro-wide business sentiment dropped by 2.3 points and the manufacturing PMI fell further into negative territory. The jobless rate stayed at 11.0% in April though this belies much higher rates in Greece, Portugal and Spain. Contagion has spread to the Spanish financial sector where banks face major loan provisions on their books, prompting the formal request for up to €100 bn from the EU. However, the Spanish government has been keen to stress that this does not represent a full-scale country bailout. Risks remain heavily skewed to the downside.