The increasing risk of a euro area recession heightens the need for the region’s governments to move quickly to implement last week’s agreement to unify regional bank regulation and give support to Spanish banks, Standard & Poor’s chief European economist said.
Deleveraging is “pushing towards recession and stagnation and the risk of a double dip has increased,” S&P’s Jean-Michel Six said in an interview in Aix-en-Provence, France. “Most economies are either in recession again -- such as Spain and Italy -- or very close to recession -- such as France and even Germany.”
To counter the slowdown, European governments should move as quickly as possible to implement an agreement by European leaders to counter the debt crisis, he said. “Execution is key,” Six said. The agreement “provides breathing space, let’s use it. We don’t have a lot of time, we have to act.”