While the European Union has been talking about making strides at working out the 3 yr old debt crisis, nothing has actually been done yet. Germany’s business confidence fell unexpectedly and may be headed into recession; Spain continues to run into squabbles with Germany and the European Union on the possibility of a bailout for their banks. Economic news reinforces the message of lackluster global growth. Even with the ECB stepping in two weeks ago we believe Europe will stay in a recession. The Euro area expected growth for 2013 is approximately .8%. Although the most recent injection of liquidity on both sides of the pond traditionally calm markets, the government debt as a % of GDP in the Eurozone is still at 90%. This should persist and cause problems in the capital markets down the road.
