The Fund said “weakness is spreading from the periphery to the whole of the euro area”, with even Germany buckling. The eurozone will shrink at a 0.7pc rate in the second half of this year before eking out growth of 0.2pc in 2013, but only if Europe delivers on a string of promises made over recent months.
The Fund said the confidence boost from the European Central Bank’s bond purchase scheme (OMT) would fade unless the plan is activated “rapidly”. It warned that “rising social tensions and adjustment fatigue” in the South could reignite the crisis in any case.
AEP’s take on the latest IMF findings in the Telegraph