Europe facing threat of new recession

Worries about the strong yen and continued scepticism about the recovery of the US economy as a result of bad news from the US real estate sector are having a negative impact on Europe's financial markets. But there is another reason for the current jitteriness of the stock markets, writes the liberal daily Corriere del Ticino: "The upturn in Europe is not homogeneous. Germany's growth, propelled mainly by exports to China, stands in contrast to the economic stagnation in other countries. ... It is the foreplay to a relapse into recession that will come as soon as the austerity measures demanded by the European Community take effect. The shrinking of the European economy could call the plans of these countries to reduce their deficits into question. Moreover some of them (above all Ireland and Spain) must reckon with higher expenditures for repairing their bankrupt banking systems. This revives fears about the strength of the euro and raises the possibility of Germany leaving the Eurozone, which goes some way towards explaining why investors are taking refuge in what they see as safe German securities."

» full article (external link, Italian)
More from the press review on the subject » Financial Markets, » Germany, » Asia, » Europe, » U.S.
All available articles from » Alfonso Tuor

» To the complete press review of Wednesday, August 25, 2010