Geo Focus: Pain Across the Pond

Pain Across the PondThings aren’t much better in Europe. In fact, they might be worse

Auto plants closing, jobs eliminated, mom and pop stores shuttered after decades in business—doesn’t this all sound familiar? Except it isn’t happening in Detroit, New York or in Anytown, USA. It’s happening all across Europe where business and government leaders say it could get worse before it gets better.

Even though European banks and businesses have managed to avoid a similar sub-prime fiasco, the continent has slipped into its own recession. All across the European Union, unemployment is approaching 8 percent, and the International Monetary Fund predicts a 2 percent decline for its overall economy, even more than the 1.6 percent predicted for the U.S.

Perhaps even more eye opening, EU companies are about $800 billion in debt—about $250 billion more in debt than U.S. companies. “It’s quite a challenging situation at this moment,” says Charles de Monchy, the global head of