The brief optimism that a resolution to financial problems in the European Union would begin a process that would resurrect the economy is over. Both economists and national leaders believe that low consumer demand, unemployment and austerity measures that have killed efforts by governments to rekindle growth have taken an ongoing toll.
According to Bloomberg:
The euro-area economy won’t return to growth until the next quarter as a recovery in Italy is delayed and France continues to shrink, according to a survey of economists.
Gross domestic product in the 17-nation region will stay unchanged this quarter, before rising 0.1 percent and 0.2 percent in the second and third quarters, the median forecast in a Bloomberg News monthly survey showed. GDP probably fell 0.4 percent last year and will decline 0.1 percent in 2013.
The survey follows a downbeat assessment by European Central Bank President Mario Draghi last week when he said that while the euro-area crisis has eased, “we are not at all seeing an early and strong recovery.” The 17-nation region’s economy last grew in the third quarter of 2011 and remains under pressure from government budget cuts and weak confidence. Goldman Sachs Group Inc. says authorities need to resolve the debt turmoil “fully” to encourage growth.