The euro zone economy stagnated in the first three months of the year quarter-on-quarter and contracted 0.2 percent in the April-June period. Economists expect another contraction in the third quarter, which would take the euro zone into recession.
"The data also shows that while the ECB promise of bond buying and the German court ruling (endorsing the euro zone's permanent bailout fund) did a lot to calm financial markets, there is still the big issue of non-existent growth," Brzeski said.
SPAIN
Elections in Galicia, the region where Rajoy was born, and in the Basque Country on October 21 could partly explain his procrastination over the aid application. Rising calls for independence from within Catalonia, one of Spain's wealthiest regions, ahead of an early regional election set for November 25 have added to uncertainty over Rajoy's ability to make powerful regional barons accept deep fiscal sacrifices.
Reforms intended to win over skeptical investors and control spending are likely to include a new tax oversight body as recommended by Brussels, curbs on early retirement, new taxes on greenhouse gas emissions and stock transactions, and scrapping some tax exemptions.
Critics say Rajoy's measures lack substance and fail to outline convincingly how they will raise the necessary cash.
"On paper they can make it all add up, but it will be hard to make the budget credible given all the reasonable doubts on the deficit target. It will be really tough to make the markets buy it," said a member of parliament for the ruling party, who asked not to be named.
http://www.4-traders.com/news/Spain-to-pass-reforms-budget-cuts-with-eye-on-aid--15239398/?countview=0
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