From the UK Telegraph:
16 Aug 2011
Growth in both Germany and The Netherlands fell to 0.1pc in the second quarter as exports faltered. France reported earlier this week that growth in its economy had sputtered out altogether. German Chancellor Angela Merkel insisted the economy was doing fine and needs no extra support. "I think we're on the right track," she said.
The sudden downturn replicates the pattern seen before the Lehman Brothers crisis in 2008 and threatens to play havoc with the debt dynamics of vulnerable countries. It also marks ominous new turn in the eurozone crisis.
Europe's survey data point to a manufacturing contraction over the early autumn, making it even harder for the struggling debtors of southern Europe to claw their way back to viability. The two fear gauges in the credit markets – the iTraxx Crossover index and the Euribor/OIS spread – are both issuing warning signals.
"We have reached the tipping point," said Andrew Robert, credit strategist at RBS. "All the props have been knocked away from global growth, the eurozone and Europe's banking system. The risks of global recession is far higher than markets are discounting."
The grim data came as Chancellor Merkel and French President Nicolas Sarkozy emerged empty-handed from their Paris summit, offering nothing concrete to restore crumbling confidence in the eurozone project.....read on
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