The European Commission said the euro-zone economy will virtually grind to a halt next year as the debt crisis ravages southern Europe and gnaws at the economic performance of export-driven Germany.
The 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent, the commission said today. It cut the forecast for Germany, Europe’s largest economy, to 0.8 percent from 1.7 percent.
The commission pointed to “wide cross-country divergences in economic activity and labor-market dynamics” in a common- currency area meant to bring Europe together, not fracture it. The commission predicted “moderate” growth of 1.4 percent in 2014 that leaves Cyprus alone in negative territory.