The Euro area is expected to contract by around 0,5 per cent this year, and the European Commission expects negative growth in 8 of the 17 Eurozone countries this year. These countries include Belgium, Greece, Spain, Italy, Holland, Austria and Portugal. Widespread fiscal consolidation, even in countries with relatively strong fiscal positions such as Germany, has contributed to the negative growth outlook.
A number of countries, such as Spain, Portugal and Ireland are attempting to reduce their deficit to GDP ratios by around 3 per cent per year for the next two years, and Italy by about 2 per cent per year.