Fourth quarter sees Eurozone even gloomier

Ben Southwood
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EUROZONE economic sentiment worsened yet further going into the fourth quarter, data showed yesterday, as worries surrounding member debt piles refused to go away.

Expert respondents rated the euro area economic climate at 81.7 in the fourth quarter, according to the Ifo Institute, down from 88.9 in the third quarter – where 100 corresponds to the climate in 2005.

These experts cited “public budget deficits” as their biggest worry, and the most important explanation of the troubling economic circumstances, ahead of a lack of demand and high unemployment.

And expectations for the future were even gloomier, at 72.1, signalling the respondents had little faith in EU and national government schemes intended to bring bloc countries back into recovery.

This survey data came as trade figures from both Germany and France revealed shrinking exports.

French exports declined €0.6bn (£0.48bn) to hit €37.6bn in September, though a bigger fall in imports meant the trade deficit shrank to €5bn.

This data will only add to the case for President Francois Hollande’s €20bn package intended to reverse the long-term slide in French competitiveness which has seen the erosion of some 750,000 factory jobs over the past 10 years.

German exports were €91.7bn in September, federal statistics office Destatis said, down 3.4 per cent on the same month last year – though the year-to-date figures showed modest growth over 2011. This left the balance of foreign trade at €16.9bn, down from €17.3bn in September last year. Manufacturing data reinforced this pessimistic interpretation of the data, showing that manufacturing turnover slipped three per cent compared to August, driven by falling foreign business.