A Few Euros More links to a Bloomberg report indicating that the string of bad news continues:
European business confidence dropped to a 21-month low in May and consumers were the most pessimistic in a year as oil prices around $50 a barrel and unemployment near a five-year high dimmed the outlook for economic growth...
"We are not seeing strong demand for European exports and there is weak domestic demand,'' said Rob Carnell, an economist at ING Financial Markets in London. ``The outlook going forward is bleak.''
Furthermore:
Consumer confidence in France, Europe's third-biggest economy, this month plunged to the lowest since records began in 2003 after unemployment in April held at its lowest since 1999, separate government reports showed today. The German jobless rate stayed close to a post-World War II high in May, dealing a blow to Chancellor Gerhard Schroeder's chances of re-election.
Some suspect the worst is yet to come:
A 25 percent increase in oil prices this year and an unemployment rate of 8.9 percent are tempering spending and investment. Confidence in the euro economy may be undermined further after French voters rejected the European Union constitution in a referendum on May 29.
The euro is heading for the biggest monthly loss in four before a Dutch referendum tomorrow that opinion polls show will also vote against the constitution, three days after the French rejection. The euro is down 3.7 percent in May as European growth trails the U.S. expansion for a fourth year...
"The decline in the euro is a sign in the current weakness in the European economy,'' said Elwin de Groot, an economist at Fortis Bank Nederland NV in Amsterdam.
But others say the lower euro is actually good news -- sort of:
Confidence may be helped in coming months by the euro's 8 percent decrease this year, making European goods cheaper in regions that use the U.S. currency, and a 10 percent retreat in oil prices in London from an April 4 record of $57.65.
Going forward "the weaker euro should provide some support to the confidence,'' says Lorenzo Codogno, co-head of European economics at Bank of America in London. Still, the decline in oil prices and the euro "for now is not enough'' to boost demand.