European Commission cuts growth forecast

The crisis in Europe does not appear to be easing off any time soon. As a result, the European Commission has cut its 2013 growth forecast for the zone. The Commission now expects the Euro zone to grow at a meager rate of 0.1% as opposed to the May 2012 estimate of 1%. Several things have triggered this downward revision. The worsening conditions in countries like Spain and Greece. Deficit triggered slowdown in the comparatively developed France. Even the performance of Germany has come under the clouds. It should be noted that Germany is largely dependent on exports to drive its economic growth. As the crisis has continued to bite away into the Euro zone, Germany has become less resistant to the troubles of the southern parts of Europe. Consequently the growth estimate of the zone's largest economy was revised down from 1.7% to 0.8%. The Euro zone's troubles stem from the huge mountains of debt that its countries have amassed. Though the region has undertaken numerous bailouts, things have not really improved. Germany has come to realize that bailouts are more of a short term fix. Euro zone needs a long term solution. Otherwise even the 0.1% growth estimate may be a little too optimistic.