Markets bounce despite new eurozone recession warning

The latest forecasts, released this morning, predict that the eurozone economy will grow by just 0.5% in 2012, a sharp reduction from an estimate of 1.5% six months ago. Olli Rehn, the EU's vice president for economic and monetary affairs, said although the EC did not expect a recession, the "unusually high uncertainty" around key policy decisions and the probability of a longer period of stagnation meant it could not be ruled out. "Growth has stalled in Europe, and there is a risk of a new recession," he said. Even if the eurozone as a whole avoids recession next year, many of its...