LONDON — Europe’s biggest economies are showing increasing signs of weakness, a sign that the struggles of their heavily indebted neighbors are spreading across the region.
The central banks of France and Britain, Europe’s second- and third-largest economies, made grim forecasts on Wednesday, while data out of Germany, its largest economy, showed a weakening in manufacturing.
Europe — which includes the 17 countries that uses the euro — has been struggling for the past three years as economies across the region face deepening recessions. Spain and Italy, the two current chief trouble spots, are threatened with a financial collapse and could soon join Greece, Portugal, Ireland and Cyprus in seeking financial assistance so that they can pay their way. This would stretch the area’s already fragile economy to breaking point.
A continued recession in Europe would be felt around the world.
Any fall-off in demand in Europe, the U.S.’s largest export customer, will affect jobs overseas.
Leading companies across the world have recently warned that any continued contraction in Europe will dent their bottom lines.
McDonald’s, the global fast food chain, reported flat growth in its sales for July on Wednesday — pushed down, in part, by a 0.6 percent dip in meals served in Europe. The region accounts for 40 percent of McDonald’s business, and the company saw guest traffic down in several southern European markets.
