Balance of Risks in Euro Area Has Deteriorated
- Business and financial market confidence in the Euro Area have waned as concerns grow that banks are overleveraged with bad debt
- The Conference Board Leading Economic Index® (LEI) for the Euro Area strengthened in February, which suggests the Euro Area may avoid a deepening of the recession
- Spain is in a deeper hole than expected, which has caused yields to rise
- “Overausterization” in Germany, the Netherlands, and the United Kingdom hampers short-term growth prospects both domestically and regionally
- France has so far avoided a downturn in GDP, but shows significant stress points in financial and nonfinancial economy