Three of Europe's biggest economies are showing new signs of weakness.
Germany, with the euro currency union's biggest economy, said Wednesday that its industrial production and exports fell in June. Analysts say the decline signals that the governmental debt crisis in the 17-nation eurozone is increasingly weighing on Berlin's economy as financially weaker countries cut their purchase of German goods.
In France, with the eurozone's second largest economy, the central bank said it expects the country to slide into recession in the July-to-September period. The Bank of France (Banque de France) predicted the economy will contract a tenth of a percentage point, after the economy fell the same amount in the second quarter and was stagnant in the first three months of the year.
French trade minister Nicole Bricq said the country's economic decline reflects a weakening world economy, but also is a result of “a problem with the competitiveness of our businesses.”
In another report, the Bank of England downgraded its projection for the British economy, which is outside the eurozone but heavily dependent on it as a trading partner. The British central bank had previously predicted one percent growth for the country's economy this year, but now says it will be almost flat.
Bank of England Governor Mervyn King compared the country's economy unfavorably to British Olympians.
“Unlike the Olympians who have thrilled us over the past fortnight, our economy has not yet reached full fitness. But it is slowly healing. Many of the conditions necessary for a recovery are in place and the Monetary Policy Committee will continue to do all it can to bring about that recovery. As I've said many times, the recovery and rebalancing of our economy will be a long, slow process, so it is to our Olympic team that we should look for inspiration. They have shown us the importance of total commitment when trying to achieve a goal that may lie some years ahead.”