In Europe, economic sentiment resumed its decline, dropping significantly in the summer months. After stagnation in the first quarter of 2012, the EU and euro-area economies contracted in the second quarter reflecting a decrease in domestic demand and lower net export growth. Unemployment increased further, in particular in the countries that were hardest hit by the sovereign- debt crisis. Available hard data and leading indicators point to a weak second half of the year. For 2012 as a whole, GDP is now expected to contract by ¼% in the EU and almost ½% in the euro area. .
