France draws fire after “alarm bells” warning
Reuters – 41 minutes ago.. .
By Daniel Flynn and James Mackenzie
PARIS/ROME (Reuters) – France came under heavy fire on global markets on Tuesday reflecting fears that the euro zone’s second biggest economy is being sucked into a spiraling debt crisis after a warning that Paris’s failure to adapt should be “ringing alarm bells”.
Nervous markets also showed concern about whether Italy’s Mario Monti and new Greek leader Lucas Papademos, unelected European technocrats without a domestic political base, can impose tough austerity measures and economic reform.
European Central Bank President Mario Draghi has predicted the 17-nation currency bloc will be in a mild recession by the end of the year, a view underlined by data showing the economy barely grew in the third quarter and faces a sharp downturn.
“The risks of a technical recession have increased and we expect the economy in Germany to shrink at least in one quarter, most likely in the first quarter of next year,” said economist Michael Schroeder of German economic research institute ZEW.