European Restructuring Monitor Quarterly - 2010, Issue 2
Europe continued to show signs of a tentative recovery with marginally positive growth and other economic indicators stabilising. There were however persistent concerns over levels of public debt and, to a lesser extent, over the stability of the euro. Unemployment had not risen in the last quarter (9.6%, EU27 in each of the three months February to May 2010) having increased sharply (by 3 percentage points) since the beginning of 2008.
The global economy was showing signs of a more robust recovery with the IMF revising growth predictions for this year and next upwards by about half a percentage point.
However, it was also predicted that Europe would underperform relative to the other advanced economies and that ‘downside risks have risen sharply amid renewed financial turbulence’ related to concerns over sovereign debt. The weakening euro offered growth possibilities for export-oriented goods producers and it was felt it might underpin private sector growth in the short term. Such growth would assume greater importance in a context of widespread cuts in public spending.