The newspapers are full of stories about the Eurozone.
One minute, EU mandarins are saying that the mounting threats to the stability of the single currency have been solved. The next minute, levels of unemployment within the Eurozone are reaching record highs.
Certainly this has been the case towards the end of 2012 and retail sales also plummeted within the same period.
The Eurozone became an economy that was rapidly plunging to ever lower depths.
Official figures recently released have finally clarified the extent of the problem, despite the eurocrats in Brussels weakly proclaiming that there is no crisis.
The net result is a clear indicator of the Eurozone's continuing recession, with even Germany still expecting to have shrunk towards the end of 2012 as it's export figures crashed.
This latest release of dire data comes after the European Commission's President Jose Manuel Barroso, released a statement to say that the threat against the euro had been essentially overcome.
He said that the question of 2013 would no longer be whether the euro was likely to fail or not. He stated that Mario Draghi, the head of the EuropeanCentral Bank, had greatly helped to put Europe back on the track towards recovery by pledging to buy the bonds of struggling governments (or at least those who vowed to deliver sweeping economic reforms and come cap in hand for a bailout).
However, Barroso might well be in the minority as far as his optimism is concerned. The crisis in Europe certainly does seem to be escalating and economists are still in doubt over whether the Eurozone could realistically remain intact in the face of mounting social and economic pressures.
The Eurozone unemployment figures hit 11.8pc in November
Economic indicators also look grim, with retail sales dropping 2.6pc year on year.
Market analysts are predicting that demand will remain depressed as the private sector works hard to pay off its debts rather than borrowing and investing its way out of the mess. Even the largest economy in the single-currency area, Germany, has finally experienced economic contraction at the end of 2012, with exports dropping by 3.4pc during November, further compounding the wider problem.
The prospect of a weaker Germany in 2013 is a risky one, particularly with regard to Eurozone projections for deficits and growth, according to analysts at BNY Mellon.
The same analysts believe that 2013 will be an even tougher year for Germany and the entire single-currency zone. A further funding crisis is to be expected, although the scale cannot yet be anticipated. And although the European Central Bank's plans to use monetary policy to support the economy were greeted positively by the market, many economists believe that this type of aid is insufficient to drive the Eurozone back to recovery on its own.
In fact, many believe that Europe is going more deeply into recession, without the central bank or individual states yet taking meaningful action.
The subsequent reforms are expected to happen in a prolonged and painful way, with falling wages, growing unemployment and ineffective monetary policy all combining to devastating effect.
This belief is certainly held by the Centre for Economics and Business Research, who doubt that the single-currency area can last for as long as its supporters suggest. At best, it seems that a long slog is ahead, but realistically the likelihood of that recovery occurring is unclear.
Is the Eurozone Still Working?
Written by David Archer
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