BRUSSELS — Optimism about the euro zone’s economy improved sharply in August, but stubbornly high unemployment, in particular in the bloc’s weaker countries, highlighted the fissure separating the recovering north from the struggling south, according to official data released Friday.
The confidence of business managers polled by the European Commission rose for its fourth successive month in the euro zone, the commission, the executive agency of the European Union, said. The positive trend was particularly strong in Germany and the Netherlands but was also evident in Italy, France and Spain.
The measure of sentiment across the bloc in August, based on business orders, industrial confidence and other factors such as companies’ hiring plans, increased by 2.7 points to 95.2.
Signs of rising confidence have inspired some analysts to predict that the 17 countries using the euro have overcome a crisis that was triggered by banks’ investment in risky mortgage debt and later drove some nations to the brink of bankruptcy.
“The most acute phase of the crisis and the toughest period of belt-tightening is behind us,” said Dirk Schumacher, an economist with Goldman Sachs.
In a separate release, Eurostat, the European Union’s statistics agency, said annual consumer price inflation in August would be 1.3 percent, down from 1.6 percent in the previous month mainly because of a drop in energy prices.
A lack of price pressures is a potential boon to the economy because households have a little more spending power and the European Central Bank can stick to its low-interest-rate policy.
But while morale improved, unemployment in the euro zone in July remained at a record high of 12.1 percent, with a sharp contrast between countries such as Germany — — just over 5 percent and Spain, more than 26 percent, showing that the improvement is not being felt everywhere.
Although there were 15,000 fewer people in the euro zone without a job compared with the previous month, , according to Eurostat3.5 million people under 25 remain unemployed.
“We haven’t broken the negative dynamic in the south of Europe,” said Guntram B. Wolff of Bruegel, a research concern. “Banking fragility, weak growth and high unemployment still present a threat.”
Article source: http://www.nytimes.com/2013/08/31/business/global/optimism-on-european-economy-continues-to-rise.html?partner=rss&emc=rss
