European confidence 'on the downturn'

27 May 2011

Confidence in the economic outlook across Europe worsened in May - the third straight month of doing so - it has emerged.

The dip came off the back of the continent's debt crisis and increasing commodity costs, which have served to cloud prospects for growth, Bloomberg reports.

According to the European Commission - reporting from Brussels - an index of executive and consumer sentiment in the 17-member euro region dropped from 16.1 in April to 105.5 this month.

A survey from Bloomberg, which focused on the median of 27 estimates, had earlier predicted a drop to 105.7.

Martin van Vilet, an economist at ING Group in Amsterdam, said: "Greek restructuring fears, high oil prices, fiscal tightening and slower external demand are damping the economic mood."

European finance chiefs recently increase pressure on Greece to improve its focus on winning improved aid conditions, adding it has a huge privatization potential that it could use to its advantage.

By Tony Aynsley

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