[Seeking Alpha] Eurozone economic confidence falls further

Economic confidence has fallen again in the eurozone, official figures showed Thursday, in another sign that the recovery is grinding to a halt in the wake of a debt crisis that has raised questions about the future of the euro currency.

The decline in confidence is likely to pile the pressure on the European Central Bank to reverse its course and start cutting interest rates, if not in October, then in November when Italy's Mario Draghi will have replaced the current head Jean-Claude Trichet.

In its monthly survey of economic conditions around the 17 countries that use the euro, the EU's executive arm, the European Commission said confidence fell further in September following the previous month's precipitous collapse. Its economic sentiment indicator stands at 95, against August's 98.4, and is below the long-run average. The last time it was lower was in December 2009.

The Commission said the decrease reflected broad-based declines in sentiment, but that industry and services suffered the worst. Among the 17 countries that use the euro, the Commission said Germany was the only country where confidence was above the long-run average.

"September's fall in the EC measure of business and consumer sentiment adds to evidence that the eurozone economy may be on the brink of recession," said Ben May, European economist at Capital Economics.

May said the survey points to a slowdown in the annual rate of growth in the eurozone to around zero percent, a sharp turnaround from earlier in the year when the single currency zone was posting stronger growth than even the U.S., as Germany in particular powered ahead on the back of a rebound in global trade volumes.

Following a run of bad economi! c data, the European Central Bank is facing mounting calls to cut its main interest rate from 1.5 percent. As recently as July, the bank raised borrowing costs despite the debt crisis afflicting the eurozone.

For the wider 27-nation EU, which also includes non-euro members such as Britain and Sweden, economic sentiment declined, too. The EU indicator fell to 94 in September from the previous month's 97.4.

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