Italy biggest risk to euro zone economy - AXA

• published: 04 Nov 2014
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ITALY BIGGEST RISK TO EURO ZONE ECONOMY - AXA Economic growth in Italy, the euro zone's third-biggest economy, has been forecast by the European Commission to be even slower over the next two years than in France. AXA Chief Economist and Head of Research Eric Chaney says Italy is now the main economic risk in the euro zone. SHOWS: LONDON, ENGLAND, UK (NOVEMBER 4, 2014) (REUTERS - ACCESS ALL) 1. AXA, CHIEF ECONOMIST AND HEAD OF RESEARCH, ERIC CHANEY, SAYING: JOURNALIST ASKING ERIC CHANEY: "Let's get your take first on the producer prices. Little bit, they did shrink, little bit better than expected. They're up on the month. What's your outlook generally for the zone?" CHANEY: "Well I think the euro area is on the verge of deflation and that prices are more likely to decline than to rise and that growth is close to a standstill. And this is the same story, it is very hard to see how growth could recover any time in the euro area for all the reasons." JOURNALIST: "I know we're waiting for some report cards from the EU, the projections. Germany expecting I think it could do a better report. Do you fear the recent raft of poor data in Germany will continue or do you think we're going to see that powerhouse creeping back in?" CHANEY: "No, I think September industry production will surprise on the upside in Germany just as August IP surprised on the downside. I really think that you need to go through the volatility of this kind of data. You need to trust the business surveys, look at the IFO survey, look at the INSEE survey and you get the real picture of the economy, and this picture is not beautiful at all. It is something like zero growth, not significantly negative, but stagnation, and I'm afraid that it is going to continue." JOURNALIST: "Who else are you particularly worried about in the euro zone?" CHANEY: "I think the main economic risk in the euro zone is Italy. Italy has been in recession for more than three years which means that debt is rising and we have just learned, we have suspicions that the banki...