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Europe faces bleak 2012

01-11-2012 08:05 BJT

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With the Europe financial crisis still looming over the continent, many eurozone countries face a tougher economic outlook in 2012. Unemployment is rampant, and some countries face possible credit rating downgrades.

These French workers are going to lose their jobs.

Their employer, the SeaFrance car ferry group, has become the latest victim of the tough economic environment as a French court ordered it to be closed down.

But the news in Paris isn’t entirely bleak.

Ratings agency Fitch says it doesn’t expect to cut France’s triple-A credit rating this year, but warned countries with ratings under review, such as Italy and Spain, could be downgraded by one or two notches. The agency expects the euro zone debt crisis to continue this year, says David Riley is Head of Sovereign Ratings at Fitch.

David Riley, head of Fitch Sovereign Rating said: "We had expectations that the European policyleaders would be able to resolve this crisis, we had a bailout package for Greece and we actually were seeing a recovery in countries like Germany and France. Unfortunately as the crisis got worse and spread to Italy in the second half of last year, we’re now going into 2012 where the economic recovery in Europe has completely stalled, so really we’ve taken a step back."

Not only has the recovery stalled, but euro zone countries also need to borrow approximately two trillion euros this year.

Investors are worried about the amount of government debt some countries need to sell.

Riley said: "Italy has to raise over 300 billion euros of funding during the course of this year. That’s going to be challenging, we think that Italy will be able to do so, although at a very high cost, but that’s going to be the real challenge over the next three or four months."

2012 is clearly going to be challenging for the euro zone and not just for the SeaFrance workers.

The ratings agency forecasts it will undergo a shallow recession as austerity measures bite and consumer and business confidence remains weak.


Editor:Zhang Rui |Source: CNTV.CN

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