Europe, Global Economy | featured news

President Barack Obama's lackluster performance in the first U.S. election debate provoked uneasiness in European capitals on Thursday, where hopes are mostly, if unofficially, pinned on his securing a second term.

The euro zone's economic woes accelerated last month and China's slowdown looked likely to extend to a seventh quarter, surveys on Wednesday showed, while the United States proved the bright spot with better-than-expected news on services and jobs.

Euro zone economic sentiment defied expectations of stabilization and again fell sharply in September, underlining the economic gloom brought on by the sovereign debt crisis as the euro zone sinks into a recession.

Stocks are opening lower on Wall Street after some gloomy economic data from Europe. Just after the opening bell, the Dow Jones industrial average is down 53 points at 13,526. The Standard & Poor's 500 index is down seven at 1,453, and the Nasdaq composite index is off 28 at 3,152.

The new tax is expected to be formally announced in the government's first budget on 28 September, but that does not mean there is a sense of panic in France. This new tax will only hit very rich individuals and only for a year or two, to help bring down the government deficit.

Spain, deflecting pressure to spell out whether it needs more European financial support, told euro zone finance ministers on Friday it will set clear deadlines for structural economic reforms by the end of the month.

French President Francois Hollande has set himself a deadline to turn around the economy by the end of 2014, but having hamstrung the effort with tax rises to meet deficit targets, economists doubt his growth goals will ever fly.

Some countries are hard-hit, like Portugal, Greece, and Italy in the case of textiles, but most countries actually come out ahead. So is rising Chinese productivity good? To quote Sam Shakusky, who’s to say? Portuguese workers certainly don’t seem to win from an increase in textile productivity. But most European workers actually come out ahead. What’s more, productivity growth will also almost certainly lead to rising wages in China, lifting hundreds of millions of people out of poverty and raising the standard of living considerably in the world’s largest country. That may be the most important factor here.

The Swiss economy has long appeared to be surprisingly resilient to the economic downturn across Europe, but the latest statistics released Tuesday showed that Switzerland is slowing down together with the rest of Europe. After a strong first quarter, the economy contracted in the second because of falling exports to the euro zone, the Alpine country's biggest trade partner. Compared with a year earlier, the Swiss economy still managed to expand at a 0.5% pace, but it contracted 0.1% from the first quarter.

Chancellor George Osborne says a third runway at Heathrow airport could be an option as he vows to "do more" to boost economic growth.