- Marchel Alexandrovich, an economist at Jefferies International Ltd.
The economic data from the Eurozone due this week will probably reflect the damage inflicted by the sovereign debt crisis. Eurozone's gross domestic product is widely expected to shrink by 0.4% during the last months of 2012. This would be the biggest decline since the first quarter of 2009, when GDP fell by 2.8% in the wake of the collapse of Lehman Brothers. Data will be publisher on February 14. On Monday, Euro-area finance ministers met in Brussels to discuss aid to Cyprus and Greece, as a tightening election contest in Italy and corruption allegations in Spain threaten to weigh on the Eurozone's recovery. In the meantime, fundamentals as well as the strength of the shared currency, are pointing at the stabilisation of the region's economy.
"The fourth quarter is probably the trough of the cycle, Draghi is hopeful that it will be," said Marchel Alexandrovich, an economist at Jefferies International Ltd. in London. "We should see some improvement in economy in the first half of this year. The question is, whether it's strong enough" given the risks that lie ahead, he said.
"The fourth quarter was a double whammy for Europe, with austerity and exports to the U.S. falling off," said Gilles Moec, co-chief European economist at Deutsche Bank in London.
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