Europe's Crisis Puts France and Italy in the SpotlightEurope's economic downturn is following a relatively coherent path. First, it affected some of the eurozone's smallest and most peripheral economies (Greece, Portugal and Ireland). Then it moved to larger economies (Spain, and to a certain extent the Netherlands and Finland), and now it is particularly concentrated in the second and third largest economies in the continental bloc, France and Italy. These will be the two key countries to watch in the final months of 2014 and throughout 2015, because the debate about the future of the eurozone will be focused on them.
On Aug. 6, the Italian statistics office announced that the country has fallen back into recession, after two consecutive quarters of gross domestic product contraction (-0.1 percent in the first quarter, and -0.2 in the second). Italy had briefly emerged from a two-year recession in the final quarter of 2013, but only in a technical sense (it barely grew by 0.1 percent). This means that the Italian economy has not grown for at least three years.
It is clear that 2014 will not be the year of economic recovery in Italy.
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