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Eurozone economic downturn deepens

Eurozone economic downturn deepens
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The eurozone’s economic downturn deepened this month, even before Cyprus’ bailout troubles, according to first results from surveys of thousand of companies.

Particularly worrying was the fact that the responses showed signs of fatigue for top economy Germany, while in the bloc’s second largest – France – businesses turned in their worst performance in four years.

The data suggests the eurozone economy will shrink 0.3 percent in the current quarter.

Most survey responses were received before news broke of Cyprus’s bailout deal, including an unprecedented levy on all bank deposits.

Survey compiler Markit, which released the preliminary data and will issue final responses at the start of April, said the picture could be even worse by then.

“Events that hit business confidence can have a very rapid effect on the data and so there is good reason to believe that responses we collect this week will on average be more negative,” said Chris Williamson, Markit’s chief economist.

“It’s really quite disappointing. Given the deterioration in the political and financial market outlook there is really little hope from what we see that there is going to be a turnaround in the second quarter, and in fact more likely an increased weakening.”