Tuesday 24 January 2012

Mixed data from euro area, economy remains in dangerous state

There was mixed news from Europe on Monday.

The initial estimate of the consumer confidence index in the euro area rose to minus 20.6 in January from minus 21.3 in December.

However, an indicator of French business confidence fell to 91 in January from 94 in December.

Meanwhile, the talks on Greek debt restructuring have not produced a resolution, with eurozone finance ministers rejecting the latest offer from private bondholders on Monday.

However, Simon Johnson thinks that Italy remains the biggest problem and, in a paper with Peter Boone, says that “we expect several more sovereign defaults and multiple further crises to plague Europe in the next several years” and that Europe's economy remains “in a dangerous state”.

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