Other european stock markets have also seen a downturn. In the euro zone, the economic outlook is becoming increasingly gloomy and never before have so many people been unemployed as in april. A total of 17.4 million people had no job in the 17 countries with the joint perception. This corresponds to an unemployment rate of 11 percent.
On friday, the purchasing managers’ indices (PMI) for industry in both the euro zone and the united kingdom fell to their lowest level in three years. They are not too far from their historic lows at the beginning of 2009, when europe and the global economy were hit by a severe recession. The industry of china, the world’s second-largest economy, is now also experiencing a noticeable economic downturn.
Meanwhile, according to a newspaper report, discussions have begun at the international monetary fund (IMF) about a rescue plan for crisis-stricken spain. The europe department of the washington-based institution is considering a loan to help the eurozone’s fourth-largest economy, the "wall street journal" wrote on thursday in its online edition.
According to the report, a three-year loan could be worth up to 300 billion euros. That would be far more than is being made available to the crisis states of greece, ireland and portugal combined. The global economy fund as well as the spanish economy minister luis de guindos denied the report.
According to the madrid government, the future of the euro will be decided in spain and italy in the coming weeks. These two countries were the weakest links in the eurozone chain after the EU bailouts of greece, ireland and portugal, said economy minister de guindos in sitges near barcelona. "The battle for the euro is currently being fought in such important countries as spain and italy, and this means that we have to act in a particularly responsible manner."
The debt crisis is now also taking its toll on private assets: according to a study by the consulting firm boston consulting, private assets in western europe shrank by 0.4 percent last year to the equivalent of 33.5 billion U.S. Dollars (25.5 billion euros at today’s exchange rate). Worldwide, on the other hand, assets rose, albeit not as quickly as in previous years.
Meanwhile, the flight of investors into safe investments continued. The average yield on german government bonds fell below one percent for the first time. Savings plans of banks and interest rates on loans are based in part on the so-called return on investment.
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