Shit Hits The Fan In Europe
French factory output dropped and Italy’s economy contracted as consumers, businesses and governments across Europe retrenched during the debt crisis.French manufacturing production fell 0.7 percent in April from March, Paris-based statistics office Insee said today, adding to concerns Europe’s second-largest economy may struggle to revive growth as the crisis deepens. Italy’s economy, the region’s third largest, shrank 0.8 percent in the first quarter as household spending and exports declined, Rome-based statistics institute Istat said in its final report on gross domestic product.
The data underline the euro area’s faltering growth prospects more than two years into a sovereign debt crisis that over the weekend forced the region’s finance ministers to agree to provide as much as 100 billion euros ($126 billion) to prop up Spanish banks. While the European Central Bank kept its benchmark rate at 1 percent on June 6, President Mario Draghi said policy makers discussed cutting the rate to a new record low after downside economic risks increased.