EURO ZONE economic recovery hopes have been thwarted by an unexpectedly sharp fall in industrial production that suggests continental Europe’s recession is only slowly losing its ferocity.
Industrial production in the 16-country region tumbled by 1.9 per cent in April, further extending the precipitous falls since the second half of last year, according to Eurostat, the EU’s statistical office. Compared with April 2008, production was 21.6 per cent lower – the steepest year-on-year fall since records began in January 1991.
The latest data will add to policymakers’ fears that the euro zone’s rebound will prove less robust than in the US. As well as the deep industrial recession, weaknesses in the banking sector remain a worry because of their importance in supplying credit to businesses and consumers.
Jean-Claude Trichet, the European Central Bank president, underscored official concerns yesterday when he urged the swift recapitalisation of banks and the rapid adoption of government schemes to help the financial sector. “In crisis times, rapid implementation is crucial,” he said in a speech in Bulgaria.
Euro zone economies proved especially vulnerable to the collapse in global demand last year, but recent forward-looking purchasing managers’ indices had suggested the downturn was losing its intensity.
