Economist warns Europe faces Recession II

A leading economist has warned the region eurozone is facing a second recession.

As pressures mount on Italy and fears of the financial crisis spreading to France take hold, Azad Zangana, European economist at investment bank Schroders, said the outlook for the eurozone economy was now “significantly more negative”.

Politicians had missed their opportunity to prevent a European credit crunch, Zangana added.

“Many eurozone banks are already on life support – unable to raise funds in capital markets and heavily reliant on liquidity from the European Central Bank.

“However, this will not be enough to stop banks from de-leveraging, and reducing lending to the real economy.