The eurozone's economic gloom has deepened with a stark warning of a "serious recession" next year - which is likely to hit the UK.
Azad Zangana, European economist at Schroders, told Sky's Jeff Randall that the outlook for the region "is negative and politicians have missed their opportunity to prevent a European credit crunch".
The global investment firm warned in its economic outlook report: "Many eurozone banks are already on life support - unable to raise funds in capital markets and heavily reliant on liquidity from the European Central Bank.
"However, this will not be enough to stop banks from de-leveraging, and reducing lending to the real economy.
"As a result, we are now forecasting a serious recession in the eurozone in 2012, which is also likely to result in recessions in the wider European region, including the UK."
The comments come as Prime Minister David Cameron said Italy now posed a "clear and present danger" to the eurozone's future.
He repeated his call for eurozone leaders to act swiftly to save the single currency: "Italy is the third largest country in the eurozone.
"Its current state is a clear and present danger to the eurozone and the moment of truth is approaching.
"If the leaders of the eurozone want to save their currency then they - together with the institutions of the eurozone - must act now."
The Prime Minister warned: "The longer the delay, the greater the danger.
"Here in Britain, outside the euro, we must prepare for every eventuality - and that is exactly what we will do."
The European Commission economic forecast echoed the fears, with Economic and Monetary Affairs Commissioner Olli Rehn warning: "Growth has stalled in Europe, and there is a risk of a new recession."
The fresh fears come despite the announcement of a new - interim - leader to bring stability in Greece.
Former European Central Bank vice-president Lucas Papademos has been installed as caretaker leader in the interim government, whose urgent job is to approve the terms of more austerity measures in exchange for the latest slice of EU bailout money to stave off bankruptcy for a few more months.
Meanwhile, in Italy, it appeared Prime Minister Silvio Berlusconi may be gone by the weekend.
He had pledged to stay until economic reforms were in place - which Italian President Giorgio Napolitano said could now be approved in days, rather than weeks.
That would clear the way for a new government, likely to be headed by former EU Commissioner and leading economist Mario Monti.
source:
http://news.sky.com/home/business/article/16107944
Dammit I knew I should have sold my stocks a couple of days ago, I can believe the Hang seng index fell 1000 points today
