News / Economy

French Pessimism Holds Back Rise in Eurozone Morale

French President Francois Hollande looks on during a press conference at the Moncloa palace as part of an Hispano-French summit in Madrid, Nov. 27, 2013.
French President Francois Hollande looks on during a press conference at the Moncloa palace as part of an Hispano-French summit in Madrid, Nov. 27, 2013.
Reuters
— Most Europeans felt more optimistic about a recovery in the eurozone in November, but pessimism in France underlined the sluggish performance of the bloc's second-largest economy.
 
Economic sentiment in the 17 countries using the euro strengthened by 0.8 points to 98.5 in the seventh straight month of gains, according to a European Commission survey on Thursday, beating economists' expectations.
 
The business climate reading turned positive for the first time since March last year.
 
But loans to households and companies in the eurozone shrank at a sharper pace in October, European Central Bank data showed, keeping pressure on policymakers to do more to buoy the recovery.
 
The eurozone is trying to pull out of a deep banking and public debt crisis that nearly shattered the currency area.
 
Record unemployment and a shortage of bank lending are a serious drag on a recovery that began earlier this year.
 
But the business survey showed that of the eurozone's five largest economies, only French morale slipped, while sentiment in Italy, Spain, the Netherlands and Germany continued to strengthen.
 
“The numbers are very encouraging given that in October there were signs that the economic upturn was stalling,” said Sarah Hewin, head of European research at Standard Chartered. “We shouldn't downplay the importance of France, but this suggests momentum is picking up,” she said.
 
French business activity shrank in November, as high labor costs and a lack of reforms hurt exports.
 
French pessimism was most notable in the European Commission's measure of eurozone consumer sentiment, which declined this month, halting an upward trend over the past year.
 
“This was mainly due to a sharp decline registered in France and reflected worsening expectations about the future general economic situation,” said the Commission, the EU executive arm.
 
Standard & Poor's cut France's credit rating earlier this month by one notch to AA from AA+ and the Commission sees France expanding by 0.2 percent in 2013 and 0.9 percent in 2014.
 
ECB may still move

Despite a return to economic growth in the April-to-June period, the economy barely grew in the third quarter and economists say the European Central Bank will have to do more to support growth.
 
Spain, which emerged from a two-year recession in the July-September period, saw economic sentiment increase by 1.4 points in November.
 
That was a stronger reading than in Germany, the euro zone's biggest economy, and showed Spain regaining the business dynamism it lost during a decade-long property boom that eventually burst and forced a eurozone bailout of its banks.
 
Overall, the bloc's services sector registered a nearly three-point jump in November. Confidence in industry also rose in the eurozone, but fell in construction and financial services.
 
Paris-based think tank the Organization for Economic Cooperation and Development called on the ECB last week to emulate U.S.-style quantitative easing, or QE, and the bank's vice president has said all options are open.
 
Inflation in the 17-nation eurozone fell to its lowest in nearly four years at just 0.7 percent in October, prompting the bank to cut rates to a record low of 0.25 percent.
 
“This month's rate cut was probably not the final move from the ECB to fight the crisis,” said Peter Vanden Houte at ING.

You May Like

Is Air Travel Safe?

Aviation expert says despite tragic losses of Malaysian Airlines flights 370 and 17, industry experienced lowest fatality rate in recorded history last year More

Multimedia 100 Days Later, Nigerian Girls Still Held

Activists holding rallies in Nigeria and several other countries to mark 100th day of captivity for more than 200 schoolgirls being held by Boko Haram More

Chocolate Too Bitter? Swap Sugar for Mushrooms

US food technology company develops fermentation process using mushrooms to reduce bitterness in cocoa beans, believes it will cut sugar content in candy More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.