EUR soars as EU economy contracts

The European Union Economic and Monetary Commission released their 2012 forecasts for the 17-nation currency. The expectation is for the Eurozone to contract 0.3 percent. This is a revised forecast from their November figures of 0.5 percent growth for 2012.

Spanish and Italian economies are projected to contract over 1 percent and will drag EU over its first  Europe wide contraction since 2009. The regulators tried to install some optimism: “Financial markets remain still rather fragile, but there are also signs of stabilization,” EU Commissioner Oli Rehn said earlier today.

Rampant unemployment and housing bubbles aftershocks will make all the PIGS governments struggle with the fiscal austerity measures to avoid a default or at the very least qualify for bailout aid from the stronger economies.

Quick outlook for the most prominent Eurozone countries in 2012:

Economies to contract

– Greece 4.3 percent

– Portugal 3.3 percent

– Spain 1 percent

– Italy 1.3 percent

Economies to grow

– Ireland 0.5 percent

– Germany 0.6 percent

– France 0.4 percent

You can find the full report in the European Commission’s website

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.