Eurozone recovery holds up despite debt crisis

LONDON (AP) — Economic sentiment in the 16 nations that use the euro rose to a three year high in November despite mounting concerns about the debt load of a number of member countries, most notably Ireland, official figures showed Monday.

The European Commission said its economic sentiment indicator for the eurozone rose to 105.3 from October’s 103.8, largely on the back of continuing improvements in the services and manufacturing sectors.

The increase was bigger than markets’ expectations for a rise to 105.

The survey will fuel hopes that the recovery in the eurozone is on a fairly sound footing despite the debt crisis gripping the single currency zone following much stronger than anticipated economic growth this year.

The key to growth is that Germany continues to grow strongly and the survey will likely reinforce hopes that the export recovery remains intact. More importantly perhaps, the survey indicated that consumer spending is on the up as unemployment declines and wage settlements rise.

Despite the further pick-up in sentiment, the European Central Bank is expected to keep borrowing costs at a record low of 1 percent at its meeting Thursday and for many months to come, partly because higher borrowing costs are the last thing the highly indebted countries like Greece, Ireland, Portugal and Spain need right now.

On Sunday, Ireland became the second eurozone country after Greece to be bailed out by its partners in Europe and the International Monetary Fund.

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