"We are at a very critical stage at the moment and there are indicators that uncertainty is on the rise again"
- Joerg Kraemer, chief economist at Commerzbank AG
The Eurozone economy is most likely to shrink in the first three months of this year, suffering the longest recession since the single currency's creation. On Wednesday the European statistics office Eurostat will show that the region's gross domestic product contracted 0.1% in the first quarter of 2013, after a 0.6% contraction in the preceding quarter. While Mario Draghi's pledge to save the shared currency by any means necessary has eased financial-market tensions, economic confidence standing at a four-month low and record high unemployment highlights the risk that the slump will persist. Also Monday, the Eurozone's policy makers expressed a willingness to think of new ways to revive their ailing economy, as they confronted fresh pressure from the U.S to take action.
"We are at a very critical stage at the moment and there are indicators that uncertainty is on the rise again," said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. "It is essential for the euro area to find the right mix between necessary austerity and measures to support economic growth as soon as possible."
"The new ‘fiscal realism' is in evidence," Mark Wall, co-chief European economist at Deutsche Bank AG in London, said in a report to clients. "Austerity may have reached its political limits and markets are happy to see some rebalancing."
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