Friday, December 16, 2011

Euro-Zone Woes Deepen

Wall Street Journal
December 16, 2011

The chances of an economic recovery in the euro zone next year appeared to deteriorate further Friday as official data showed Ireland fell back into contraction in the third quarter and France's statistics agency warned a recession is imminent.

Other data Friday showed euro-zone workers' incomes falling in real terms and the trade surplus shrinking, fueling concerns over a downturn.

Ireland's Central Statistics Office said the economy contracted 1.9% in the third quarter from the second quarter, denting hopes for other euro-zone governments that the country might be a poster child for how to push through deep spending cuts and still achieve economic growth.

Jonathan Loynes, chief European economist at Capital Economics, said that despite the advances the country has made, the data "put something of a dent in hopes that Ireland was starting to reap the rewards of its economic reforms and austerity measures."

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