The progress made by recent positive developments in the 17-nation currency bloc (including the settlement of Greek aid and approval of the regional banking supervision outline) could be undone by the imminent resignation of Italian Prime Minister Mario Monti and the latest data releases for the region.
The most recent reports indicate that if Monti does abandon his struggling nation in its time of need the ensuing political uncertainty could delay economic recovery in the Eurozone by at least a year.
And now, according the Luxembourg-based European Union statistics office, Eurozone exports for October have dropped for a second consecutive month.
Earlier in December the President of the European Central Bank, Mario Draghi, asserted that ‘Weak activity is expected to extend into next year, and it seems he wasn’t wrong.
This latest decline, of a seasonally adjusted 1.4 per cent, follows September’s fall of 1.3 per cent.
In Germany – the Eurozone’s largest and most influential economy – exports fell by 3.6 per cent in October. France and Italy, other key players in the currency bloc, posted declines of 2.1 and 1.4 per cent respectively.
The report also showed that imports to the currency bloc increased by 0.6 per cent and the trade surplus tapered to 7.6 billion Euros from September’s revised figure of 11 billion Euros.
Despite this, recent statistics have shown economic confidence in the Eurozone experiencing a surprising rise while investor confidence in Germany saw a sharp increase in November.
It seems that even if the Eurozone takes more knocks in the weeks ahead economic recovery could still be on the not-too-distant horizon.
One industry expert commented: ‘There aren’t many signs that the economy will be improving before the second half of next year. At least things aren’t going to be worse than this year. Confidence has improved because of the perception that the ECB and European leaders are slowly but surely moving in the right direction.’
Similarly, an economist with Deutsche Postbank stated: ‘The euro-area economy reaches its bottom in the fourth quarter of this year. From then on, it will go upwards. I expect a stabilization starting in the first quarter of 2013’.
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As of 13:25 pm
The Pound to Euro exchange rate is currently trading at 1.2308
The Pound to US Dollar exchange rate is currently trading at 1.6207
The Pound to Australian Dollar exchange rate is currently trading at 1.5385
The Euro to US Dollar exchange rate is currently trading at 1.3165
The Euro to Pound exchange rate is currently trading at 0.8122
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