Europe's growth outlook at mercy of debt politics

Simon Tilford, chief economist at the CER  said he expected no substantive change to current policy settings: fiscal policy was highly contractionary and monetary policy was relatively restrictive given the depth of the the euro zone's malaise. What's more, all countries in the bloc were trying to export their way out of their problems, sapping aggregate demand, and bank recapitalisation plans risked leading to a credit crunch. "We're not going to see meaningful reform of the euro zone's macro economic policy framework. It's not even under discussion. That is the single biggest obstacle to a recovery of economic growth," Tilford said.