Europe’s austerity drive was put under the microscope today as ministers brace themselves for more economic gloom from the eurozone this week.
The Eurogroup, comprising euro members’ 17 finance ministers, was set to discuss fiscal policies as France became the latest nation to gain more time to cut its deficit. Although the immediate crisis has eased, official estimates on Wednesday are expected to show the sixth successive quarter of economic decline and countries like Spain are labouring under record unemployment. The European Central Bank cut interest rates to a record low 0.5% two weeks ago.
Chris Scicluna, head of economic research at Daiwa Capital Markets Europe, said: “They will have to recognise that a more measured approach to fiscal consolidation is required. The case for that will be crystal clear when the GDP figures come out on Wednesday.”
