Europe

Economic developments in the Eurozone showed a very mixed picture in the year under review. The economy cooled appreciably after a brisk start to 2011. An increasingly restrictive financial policy as well as uncertainties surrounding the unfolding of the European sovereign debt crisis crippled internal economic activity. Export-oriented countries with relatively healthy public finances and a strong ability to compete internationally, such as Germany, the Netherlands, Finland and Austria, delivered above-average increases in output. The situation was a different one in Greece, Ireland, Portugal and Spain, where the tendencies towards recession became more marked on account of intensive consolidation efforts. Particularly dramatic in 2011 was the plight of Greece, which was only able to avert a sovereign default thanks to considerable assistance from the European Union. The onset of this economic slowdown was also apparent on labour markets. Most notably, countries on the Eurozone periphery were faced with high jobless levels that continued to rise.