Europeans will go to the polls this weekend against a backdrop of worsening recession as fresh evidence of the eurozone’s deepening malaise emerged today.
Markit’s latest snapshot of the manufacturing and services sector across the 17-nation single currency bloc signalled the fastest decline since last October, with contractions in France, Italy and Spain. The region’s economic powerhouse, Germany, is meanwhile slipping closer to stagnation.
France is poised to elect a Socialist President for the first time since 1981. A victory for Francois Hollande is likely to build pressure on German Chancellor Angela Merkel to ease austerity.
Greece’s elections may be an even bigger flashpoint, as neither the centre-right New Democracy nor PASOK’s socialists are likely to win a clear majority – potentially sparking calls to renegotiate the hugely unpopular terms of its latest €130 billion (£106 billion) bailout. Regional elections will also be held in Italy and Germany.
The eurozone’s double-dip recession is set to be officially confirmed this month. Markit warned: “Business conditions deteriorated at a faster rate towards the end of the month. The economy was contracting at a quarterly rate of around 0.5% in April, extending the downturn into a third successive quarter.”
