The financial ministers of the euro area will meet over the next two days. There is a very wide range of topics that they might discuss. The gathering should begin with some optimism about ECB plans for aiding crippled economies in the region, although the aid comes with strings. Yields on the sovereign paper of weak countries have come down sharply, which will make it easier for them to fund deficits. But in the background are the recent figures on unemployment, business confidence and production throughout the area.
And there have been increases in forecasts the entire region will fall back into recession. Almost no one would argue that the economies of Spain, Greece, Portugal and perhaps Italy won't be hurt for years. The most recent economic figures show that France already has slipped perilously close to GDP contraction, and Germany has begun to suffer significantly, too.
As often as it is said, it is worth repeating: the real trouble in Europe cannot be solved by the European Central Bank or modest bailouts.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Economy