LONDON (AP) — Weakness in the eurozone's major economies, such as Germany and France, risks choking off the growth emerging in countries that were at the forefront of the region's debt crisis, a closely monitored survey indicated Tuesday.
In its monthly survey of business activity, financial information company Markit said the eurozone ended 2014 on a tepid note despite "signs of life" in countries like Ireland and Spain, which were hit hard by the financial crisis.
It said its so-called purchasing managers' index rose to 51.4 points in December from 51.1 the previous month. However, that was down from a preliminary estimate for December of 51.7, with figures above 50 indicating expansion. Overall, that suggests that the rate of economic expansion during the fourth quarter was the weakest since the third quarter of 2013.
Markit estimates that the eurozone, which now numbers 19 countries following Lithuania's adoption of the euro at the start of January, grew by a quarterly rate of 0.1 percent in the last three months of the year, continuing the trend of minimal growth since the recession ended in the middle of 2013.
"The eurozone will look upon 2014 as a year in which recession was avoided by the narrowest of margins, but the weakness of the survey data suggests there's no guarantee that a renewed downturn will not be seen in 2015," Markit's chief economist Chris Williamson said.
Williamson said he was particularly concerned by the downturns in France and Italy, as well as the "stuttering" performance of Germany, Europe's economic powerhouse.
He warned that the recoveries in countries like Ireland and Spain, which are enjoying their best growth spells in years, "are in danger of being extinguished by malaise spreading from the region's largest economies."
The weakness of the data will likely add to calls for more aggressive action from the European Central Bank. Its president, Mario Draghi, recently hinted that the bank stands ready to launch a full-blown bond-buying program similar to those undertaken by other central banks, such as the U.S. Federal Reserve and the Bank of England. Many experts think the ECB could make the announcement at its next monetary policy meeting on Jan. 22.
Although the ECB has cut interest rates to record lows and backed the purchase of some private-sector bonds, it has refrained from a full-scale bond-buying program — so-called quantitative easing, or QE. The euro has been in retreat for months on the back of expectations that the ECB will back a further stimulus as traders anticipate more of the currency in circulation. On Monday, the euro fell to a nine-year low against the dollar.
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