European Confidence Index Falls to 90.6 in May, Lowest Since Oct. 2009

May 30, 2012 9:54 AM EDT
Economic confidence in the 17-member euro zone fell to a two-and-a-half year low in May, according to new data from the European Commission Wednesday.

A survey of executive and consumer sentiment in the region came in at 90.6 for the month, down from a revised reading of 92.9 in April. Bloomberg estimates had the index dropping down to just 91.9. The number is the lowest since October 2009.

Much of the reduced sentiment has to do with the Greek election which took place in May, leading to the failure to form a government. Greece will hold new elections on June 17th. Despite the potential swing in politics for Greece, many Wall Street firms still see Greece leaving the euro zone by 2013.

In addition, euro zone manufacturing and service indicators contracted more than expected in May with German business sentiment showing its steepest decline since last August.

Finally, recent news of bank consolidation in Spain as well as Bankia being unable to get a bridge loan from the ECB is not helping matters too much. For more on Spain's woes, click here.

U.S. markets are lower in early trading Wednesday.

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