(menafn – ecpulse) European confidence halted its drop this month after it fell for eight straight months beyond the lowest level in nearly three years last month amid the worries regarding escalation of debt crisis as European leaders stepped up their crisis response.
Economic confidence rebounded to 85.7 in November, from a revised of 84.3 which was 84.5 initially, compared with estimates of 84.5.
Meanwhile, there is some confidence after euro area finance ministers agreed with the IMF on Greeces coming fiscal path as they agreed to reduce Greece’s interest rates and gave it more time to pay back aid loans.
The deal included making the debt targets for Greece at 124 percent of GDP in 2020 and below 110 percent in 2022 in addition to giving it an additional 15 years to repay loans, while cancelling the proposal of cutting the total debt owed.
With such a deal Greece would be able to receive its coming disbursements worth 34.4 billion euros on December 13.
Yet, Moody’s Investors Service mentioned in a report today that Greece’s debt burden remains unsustainable despite the debt agreement clinched between eurogroup finance ministers and the IMF on Monday.
Last week, German business confidence unexpectedly halted its drop for a seventh straight month in November, rebounding from the lowest level in 2 1/2 years to 101.4 this month from 100 in October.
Consumer confidence lingered at -26.9 and business climate indicator showed a rise to -1.19 from a revised of -1.61.
Euro area the manufacturing sector showed an ease in contraction in November to 46.2 from 45.4 in October, while euro zone PMI manufacturing index rose to 46.2 this month, from 45.4 in October. However, euro-area services and manufacturing output recorded a contraction for a 10th month in November.
Industrial confidence soared to -15.1 this month from a revised of -18.3 and services confidence plunged to -11.9 from a prior of -12.1.
In fact, the sharp austerity measures adopted by European governments to adhere to the strict EU budget rules are weighing on consumer spending and pushing up unemployment rates.
The euro area, meanwhile, is in recession after dropping 0.2% in the third quarter. Draghi said the economy will remain weak in near term as growth risks still on downside, where growth momentum to stay weak in 2013 as economic outlook is being revised.
"As regards second half, available indicators continue to signal weak activity,” Draghi said revealing that balance sheet adjustments will weigh on outlook.
After it left interest rate on hold this month, the ECB revised down its growth forecasts for the euro area in September to have a real GDP growth in a range between -0.6% and -0.2% this year and between -0.4% and 1.4% for 2013.
As of 10:15 GMT, the euro resumed its advance against the U.S. dollar to trade around 1.2978 from the days opening of 1.2951.