Financial thoughts

They were lined up 300 deep before the store opened at 8 a.m.

Fans of Maple Leaf Gardens and Loblaws came to see how Canada

Don Buckley lost his job driving a Chicago Transit Authority bus almost two years ago and has been looking for work ever since, even as other municipal bus drivers around the country are being laid off.

At 34, Buckley, his two daughters and his fiancée have moved into the basement of his mother’s house same day payday loans. He has had to delay his marriage, and his entire savings, $27,000, is gone.

“I was the kind of person who put away for a rainy day,” he said recently. “It’s flooding now.”

Buckley is one of tens of thousands of once solidly middle-class African-American government workers

Fresh clashes between security forces and Egyptian protesters demanding the military step down broke out Saturday in front of the Cabinet building, leaving one man dead, as violence threatened to overshadow next week’s parliamentary elections.

Meanwhile, Field Marshal Hussein Tantawi, the head of the ruling military council that took power after Hosni Mubarak was ousted in February, met separately with opposition leader and Nobel Peace laureate Mohamed ElBaradei and presidential hopeful Amr Moussa, who was the former head of the Arab League. Egyptian state TV reported the meetings but gave no details.

The new prime minister, whose appointment by the military on Friday touched off a wave of anger among protesters accusing the army of trying to perpetuate the old regime, also held a series of meetings trying to sway youth groups to his side.

State TV said Prime Minister Kamal el-Ganzouri, who is unpopular in part because he served under Mubarak, offered Cabinet positions and is pondering the formation of an advisory council to be composed of leading democracy advocates and presidential hopefuls.

The suggestion however failed to disperse the protesters, with nearly 10,000 packing into Cairo’s central Tahrir Square as organizers called for another mass rally on Sunday.

Twenty-four protest groups, including two political parties, have announced they are creating their own “national salvation” government to be headed by ElBaradei with deputies from across the political spectrum to which they demanded the military hand over power.

ElBaradei said in a statement that he would be willing to form a such a government to manage the country’s transition, and that if he were officially asked to put a government together, he would give up the idea of running for president in order to focus on the current phase of transition.

Outside the Cabinet building, hundreds of protesters set up camp, spending the night in blankets and tents to prevent the 78-year-old el-Ganzouri from entering to take up his new post. Early Saturday, they clashed with security forces who allegedly tried to disperse them.

An Associated Press cameraman saw three police troop carriers and an armored vehicle firing tear gas as they were being chased from the site by rock-throwing protesters.

The man who was killed was run over by one of the vehicles, but there were conflicting accounts about the circumstances surrounding the death.

The Interior Ministry expressed regret for the death of the protester, identified as Ahmed Serour, and said it was an accident. Police didn’t intend to storm the sit-in but were merely heading to the Interior Ministry headquarters, located behind the Cabinet building, when they came under attack by angry protesters throwing firebombs, it said in a statement. The ministry claimed security forces were injured and the driver of one of the vehicles panicked and ran over the protester.

One of the demonstrators, Mohammed Zaghloul, 21, said he saw six security vehicles heading to their site.

“It became very tense, rock throwing started and the police cars were driving like crazy,” he said. “Police threw one tear gas canister and all of a sudden we saw our people carrying the body of a man who was bleeding really badly.”

Officials say more than 40 people have been killed across the country since Nov. 19, when the unrest began after a small sit-in by protesters injured during the 18-day uprising that ousted Mubarak was violently broken up by security forces. That sparked days of clashes, which ended with a truce on Thursday. It wasn’t clear whether the melee on Saturday was an isolated incident or part of fresh violence by security forces trying to clear the way for the new prime minister, and protesters frustrated by what they believe are the military’s efforts to perpetuate the old regime.

“El-Ganzouri was pulled out of his grave. He was a dead man,” said a 39-year-old employee Ahmad Anas as chants against the head of the military council filled the air outside the Cabinet building: “Tantawi and el-Ganzouri are choking me.” A banner hanging over the building gates read: “closed until execution of field marshal.”

El-Ganzouri served as prime minister under Mubarak between 1996 and 1999. His name has been associated with failed mega projects including Toshka, an ambitious and expensive scheme to divert Nile water at the southern tip of Egypt to create a second Nile Valley. The project has cost billions and barely gotten off the ground.

The military’s appointment of el-Ganzouri, along with its apology for the death of protesters and a series of partial concessions in the past two days suggest that the generals are struggling to overcome the most serious challenge to their nine-month rule, with fewer options now available to them.

Hala al-Kousy, a 37-year-protester, vowed that protesters will not leave the square until the Supreme Council of the Armed Forces, the formal name of the military’s ruling council, gives up power.

“They are willing to wait and so are we,” al-Kousy said.

Egypt’s first parliamentary elections since Mubarak was replaced by the military council are slated to begin Monday. The vote, which the generals say will be held on schedule despite the unrest, is now seen by many activists and protesters to be serving the military’s efforts to project an image of itself as the nation’s saviors and true democrats.

However, boycotting elections is a hard choice for many youth groups who rose up against Mubarak’s autocratic regime in hopes of ushering in democracy, fair and free elections. Others have been engaged in awareness campaigns or are fielding candidates. Many said that even if they vote, they will continue their sit-in.

Mohammed el-Qassas, one of the founders of The Egyptian Current party, which was born out of the revolution, described the general atmosphere, as “saddening,” but said he will vote just to “put my voice in the ballot.”

A member of another youth group, Injy Hamdi, 27, said “we will all go to the ballot boxes, vote and then come back to the square.”

Mohammed Abdel-Moneim, 38, said the protesters would not allow any election tampering, allegedly widespread during the past regime.

“We protect the ballot boxes with our bodies and lives if we have to. We fought hard for this right to vote,” he said.

The next parliament is expected to be dominated by the country’s most organized political force, the Muslim Brotherhood. The group decided to boycott the ongoing protests to keep from doing anything that could derail the election. However, the outcome of the vote is likely to be seen as flawed given the growing unrest and the suspension by many candidates of their campaigns in solidarity with the protesters.

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The worst week for the stock market in two months ended with a whimper in thin trading Friday.

The Dow Jones industrial average lost 4.8 percent this week, while the broader Standard & Poor’s 500 index fell 4.7 percent. Both had their worst weeks since Sept. 23.

Major indexes wavered throughout Friday’s session, which was shortened because it’s the day after Thanksgiving. Worries about Europe’s debt crisis flared up again after Italy had to pay 7.8 percent to borrow for two years at a debt auction. It’s another sign that investors are increasingly hesitant to lend to European countries.

The euro slipped to $1.32, losing 2 percent this week against the dollar. The drop puts the euro at its lowest level since Oct. 4.

Higher interest rates on government debt of Italy, Spain and other European countries have rattled stock markets in recent weeks. When borrowing costs climb above the 7 percent threshold, it deepens investor fears about a government’s ability to manage its debts. Greece, Ireland and Portugal had to seek financial lifelines when their interest rates crossed the same mark.

The Dow fell 25.77 points, or 0.2 percent, to close at 11,231.78. Of the Dow’s 30 stocks, Chevron Corp. lost 1.6 percent Friday, the biggest drop. Travelers Cos. Inc. added 1.2 percent, the largest gain.

The S&P 500 lost 3.12 points, or 0.3 percent, to 1,158.67. The Nasdaq composite dropped 18.57, or 0.8 percent, to close at 2,441.51.

Trading volume was 1.6 billion, less than half the daily average.

Markets were battered this week as governments in Europe and the U.S. struggle to tackle their debts. The Dow lost 248 points on Monday as a Congressional committee failed to reach a deal to cut federal budget deficits. It plunged 236 points Wednesday after investors balked at buying German government debt.

Retailers traded mixed on the Friday after Thanksgiving, the traditional start of the holiday shopping season and usually the busiest day of the year for retailers. Amazon.com Inc. dropped 3.5 percent. Wal-Mart Stores Inc. inched up 0.4 percent.

A record number of people were expected to show up at stores this weekend to take advantage of deep discounts. The National Retail Federation estimates that 152 million people will go shopping over the three days starting on Friday. That would be an increase of 10 percent from last year.

AT&T’s stock dipped less than 1 percent. The company said Thursday that it is budgeting to pay $4 billion in break-up fees if its attempted $39 billion takeover of T-Mobile USA from Deutsche Telekom falls apart.

Four stocks fell for every three that rose on the New York Stock Exchange.

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The parents of Madeleine McCann, whose 2007 disappearance sparked a media frenzy, told a London courtroom Wednesday how they were left distraught by the relentless U.K. press and its insinuations they were responsible for their daughter’s death.

Kate and Gerry McCann told Britain’s media ethics inquiry that the coverage had hurt their efforts to find their daughter after she vanished during a family vacation in Portugal, shortly before her fourth birthday.

“We were trying to find our daughter and you (the media) are stopping our chances of doing that,” Kate McCann said.

“These were desperate times,” she said, adding that the couple felt powerless. “When it’s your voice against a powerful media, it just doesn’t hold weight.”

Madeleine’s disappearance sparked an international manhunt and intense press coverage. The McCanns said the press was initially sympathetic but soon changed, with some articles implying the couple was hiding something.

The couple successfully sued several British newspapers over suggestions that they had caused their daughter’s death and then covered it up.

Prime Minister David Cameron set up the public inquiry into media ethics and practices in response to a still-evolving scandal over phone hacking by tabloid journalists. This week it has taken evidence from celebrities including actor Hugh Grant and comedian Steve Coogan, and from ordinary people left bruised by unwanted media attention.

Gerry McCann said he and his wife did not think their phones had been hacked, but he volunteered to testify at the inquiry “for one simple reason _ we feel a system has to be put in place to protect ordinary people from the damage the media can cause.”

Inquiry lawyer Robert Jay said the couple had experienced “the good, the bad and the particularly ugly side of the press.”

It is still not clear what happened to Madeleine, despite her parents’ far-reaching international campaign and numerous reported sightings from around the world.

Earlier, a lawyer for several phone hacking victims said that illegal eavesdropping was widely practiced by Britain’s tabloid journalists, producing stories that were both intrusive and untrue.

Mark Lewis said phone hacking was not limited to Rupert Murdoch’s News of the World tabloid, which the media mogul shut down earlier this year as outrage grew over the scandal.

“It was a much more widespread practice than just one newspaper,” he said.

Lewis claimed that listening in on voice mails was so easy that many journalists regarded it as no more serious than “driving at 35 mph in a 30 mph zone.”

He said the News of the World got caught because it hired a private investigator, Glenn Mulcaire, who kept detailed records of his snooping assignments. Mulcaire and News of the World reporter Clive Goodman were jailed in 2007 for hacking into the voice mails of royal aides.

“The fact that evidence doesn’t exist in written form doesn’t mean to say that the crime didn’t happen,” Lewis said.

Lewis said when a News of the World reporter was arrested for phone hacking in 2006, he had a “eureka moment” about the source of a false story on two of his clients.

The story alleged a romantic relationship between soccer players’ association chief Gordon Taylor and lawyer Joanne Armstrong. Taylor said he believed the story was based on a voice mail message from Armstrong thanking Taylor for speaking at her father’s funeral.

The message said: “Thank you for yesterday. You were wonderful.”

Lewis said a tabloid journalist “added two and two and made 84. … If it hadn’t been so sad, it would have been funny.”

In 2008, Murdoch’s News International agreed to pay Taylor hundreds of thousands of pounds (dollars) in compensation for the hacking of his phone in return for keeping quiet about the deal _ one of several attempts by the company to hush up the scale of its illegal activity.

Murdoch shut down the News of the World in July after evidence emerged that it had routinely eavesdropped on the voice mails of public figures, celebrities and even crime victims in its search for scoops.

More than a dozen News of the World journalists and editors have been arrested and several senior Murdoch executives have resigned in the still-evolving scandal. Two top London police officers also lost their jobs, along with Cameron’s media adviser.

Lewis has represented many prominent hacking victims, including the family of murdered 13-year-old Milly Dowler, whose voice mails were accessed by the News of the World after she disappeared in 2002. The girl’s parents spoke Monday before the U.K. inquiry, saying the hacking gave them false hope their daughter was still alive during the investigation into her disappearance.

The inquiry, led by Judge Brian Leveson, plans to issue a report next year and could recommend major changes to media regulation in Britain.

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Ninety-three percent of Italians believe cutting the country’s hobbling public debt is a top priority, but few are willing to make personal sacrifices to do so, according to an AP-GfK poll released Tuesday.

Only about a quarter of Italians favor reforming labor laws to make it easier to fire workers, or raising the retirement age from 65 (and sometimes lower) to 67 _ two of the reforms considered critical to curb Italy’s public spending and boost economic growth.

But while the European Union is demanding such reforms, 52 percent of Italians still have a favorable view of the EU, and a full 76 percent think Italy should stay in the 17-nation eurozone, according to the survey, conducted last week.

Italy has been engulfed in financial turmoil for weeks as markets woke up to the enormous size of its debt _ euro1.9 trillion ($2.6 trillion), a eurozone high coming in at 120 percent of gross domestic product. The market turmoil and a loss of confidence in Italy’s ability to repay forced Premier Silvio Berlusconi to resign Nov. 12, ending his 17-year domination of Italian politics.

The AP-GfK poll was conducted Nov. 16-20, during the first days of economist Mario Monti’s new government, made up of bankers, academics and corporate executives instead of politicians. Monti is under enormous pressure to quickly rein in the debt and get the economy growing again.

Italy’s economy is hampered by high labor costs, low productivity, fat government payrolls, excessive taxes, choking bureaucracy, and low numbers of college graduates. Yet as the third-largest economy in the eurozone, Italy is too big for Europe to bail out like it did Greece, Portugal and Ireland.

Monti got high marks from the Italians surveyed after he was tapped to lead the country, garnering a 67 percent favorability rating. Only 10 percent had a negative view and 16 percent were neutral.

“Let’s say there’s hope,” said Fortunato Porcheddu, 63, as he strolled Tuesday with a friend through a piazza in Rome. “If I close my eyes and look back over the past 15 years and everything that has happened, I cringe.”

Monti has pledged to reform Italy’s pension system, re-impose a property tax annulled by Berlusconi’s government, fight tax evasion, streamline civil court proceedings, get more women and young people into the workforce and cut political costs.

But, critically, only 32 percent of Italians surveyed are strongly confident that his technocratic government can fix the country’s economic ills. Forty-two percent say they’re “moderately confident” and 22 percent say they have little or no confidence he can turn Italy’s finances around.

While there is some hopefulness about the future of the economy _ 55 percent anticipate a better situation five years from now _ the longer-term picture is gloomier. Only 35 percent of Italians think people will be better off in 20 years than they are today, while 43 percent anticipate a harder life for the next generation.

“Our generation always looked forward with the possibility of improvement,” said Alfonso Marozzi, 72, as he strolled in Rome. “Now, young people are resigned to wonder if they’ll be able to hold onto what their parents were able to build. There’s a lack of hope in the future.”

The survey found that Italians are especially concerned about corruption: 87 percent called it an “extremely” or “very serious” problem. Unemployment, the debt and organized crime followed.

A full 93 percent of Italians said reducing the public debt was either an “extremely” or “very important” goal for the government to tackle over the next decade cash advance flexible payments. Only 2 percent said it was “not too important” or “not at all important.”

Yet only 26 percent of those surveyed favored raising the retirement age to 67 to help cut spending, while 67 percent were opposed. Parliament recently passed legislation raising the retirement age to 67 starting in 2026 and to 70 by 2050, but critics say the reforms are meaningless because any savings they produce are too far in the future.

Monti is expected to seek more reforms to the pension system and to try to make the contribution system more equitable.

Italian politicians have made few efforts to reform the labor market, and the AP-Gfk poll shows why. Seventy percent of respondents opposed deregulating the labor market to make it easier to fire workers, with only 22 percent favoring it. Of the 70 percent opposed, a full 56 percent were “strongly opposed.”

Ultimately, labor market reforms are likely to be much broader than just changes involving firing. Monti’s government is expected to open up “closed professions,” such as lawyers, notaries and taxi drivers, which in some cases restrict entry to people with connections or set standard prices that deprive the market of competition.

Monti also plans to loosen Italy’s system of collective bargaining, in which unions negotiate with entire industries rather than individual companies. Italy’s biggest carmaker, Fiat, told unions Monday that it is tossing out the old model as of Jan. 1 and will seek to negotiate new contracts plant by plant _ something it has already done in four locations.

Raj Badiani, an economist at IHS Global Insight in London, said Fiat “is probably the forerunner of what we need to see.” But he cautioned: “Trade union opposition to that will be immense.”

Unions have balked at any labor market reforms, and so far the austerity measures that have been passed by Parliament haven’t touched the thorny issue.

Still, the AP-GfK survey found that labor unions in general get broadly negative ratings from Italians, with 53 percent of respondents saying they “only sometimes” or “never” trust unions to do the right thing.

Only 20 percent of Italians surveyed had a favorable opinion of Berlusconi, with 67 percent having an unfavorable view and 56 having a “strongly unfavorable” impression of the billionaire media mogul.

After Italian President Giorgio Napolitano, the leader with the most favorable ratings? President Barack Obama, with a 78 percent favorability rating.

Armando Manni, a 50-year-old who tends olive groves in Tuscany, said young Italians have to become more like their Anglo-Saxon colleagues and leave home to pursue their dreams rather than stay where their mothers cook, clean and wash their clothes until they’re well past age 40.

“A country that doesn’t have dreams is a country that is almost dead,” he said as he shopped for tomatoes.

The AP-GfK poll of 1,025 Italian adults across the country was conducted Nov. 16-20 using landlines and cell phones by GfK Eurisko Italy under direction of the global GfK Group. It had a margin of error of plus or minus 3.3 percentage points.

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AP Poll is at http://www.ap-gfkpoll.com

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Singapore warned Monday that its economy will likely suffer a sharp slowdown next year as export demand from developed countries wanes.

Gross domestic product growth will probably drop to between 1 percent and 3 percent in 2012 from 5 percent this year, the Trade and Industry Ministry said.

“Singapore’s externally oriented sectors such as electronics and wholesale trade will continue to perform poorly,” the ministry said in a statement. “Although resilient domestic demand in emerging Asia will provide some support to global demand, it will not fully mitigate the effects of an economic slowdown in the advanced economies.”

Singapore, an island of 5.1 million people off the southern tip of the Malay Peninsula, relies on exports, finance and tourism to maintain one of the world’s highest levels of GDP per head.

Because of its high reliance on trade, Singapore is often a bellwether for the rest of Asia.

The economy grew 6.1 percent in the third quarter from a year ago and a seasonally-adjusted annualized 1.9 percent from the previous quarter, the ministry said.

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Builders have found a way to make money in a decrepit home market: Apartments.

Permit requests to build apartments jumped to a three-year high last month. In 12 months, they’ve surged 63 percent.

Blame the housing bust, which left many people without the means, the credit or the stomach to buy. More people need apartments. The demand has driven up monthly rents. And apartment-home builders are rushing to cash in.

That said, the overall home market remains depressed. Builders are still struggling. They broke ground on a seasonally adjusted annual rate of 628,000 homes last month, the government said Thursday. That’s barely half the pace that economists equate with a healthy market.

High unemployment, stagnant pay and waves of foreclosures have slowed sales of single-family homes, which make up about 70 percent of the home building market. Apartment construction may be surging, but it’s a small portion of the industry.

More apartment building won’t add enough jobs to reduce unemployment or hasten an end to the housing crisis. Still, it’s contributed to the overall economy’s growth for two straight quarters. And many economists expect apartment construction to grow for at least the next 12 months, as long as the economy avoids another recession.

“You’re not going to see apartments as an economic driver,” said James Marple, senior economist at TD Economics. “But it’s renters who are clearly going to drive the demand for housing.”

It’s also worth keeping the increase in perspective: The growth in apartment construction is coming off extremely low levels. Last year, for example, only 146,000 apartments were built. That was the fewest since 1993. This year’s pace isn’t much more.

By comparison, in 2005, just before the housing market went bust, 258,000 apartments were built. Some signs suggest that builders could match that level over the next few years.

One such sign: Permits for apartment buildings, a gauge of future construction, have jumped more than 60 percent over the past year. That compares with just 6.6 percent growth in permits for single-family construction over the same period.

“The demand is there,” said Mark Obrinsky, chief economist at National Multi Housing Council. “Rents have recovered, much of them to where they were before the recession.”

Bob Champion, who runs a real estate company in Los Angeles, says he has four apartment projects in development. That matches the number he had in 2005.

It’s quite a shift from 2006, when Champion’s company stopped building apartments because the cost of land had skyrocketed.

Champion has raised rents about 4 percent this year. His occupancy rate is 95 percent. As recently as last year, his rents were flat, and he was dangling incentives, like a free month’s rent, to woo tenants.

“People who can’t afford to buy a home, rent,” Champion said. “That’s why the apartment market has stayed healthy.”

Champion won’t likely be building as many apartments next year, though. Land prices have doubled in the past two years, he said. Competition for apartment land has intensified.

For many builders, financing for a project remains a big obstacle. So is time. Apartment projects take an average of 18 months to build.

Still, fewer home buyers mean more people must rent. Nearly 4 million new renting households were created between 2005 and 2010, according to Harvard’s Joint Center for Housing Studies. Under normal economic conditions, that’s more than 10 times the number of new renters who would be expected in a five-year span.

Homeownership has fallen more over the past decade than in any other 10-year stretch since the Great Depression. Roughly 65 percent of Americans own homes. That’s down from a peak of nearly 70 percent in the middle of the decade.

As more people have become tenants, landlords have felt emboldened to raise rents.

The average rent in the United States has risen 2.4 percent over the past 12 months to $1,004 a month, according to the real estate data firm Reis Inc. Over the previous year, rents rose just 1 percent. Between 2008 and 2009, they actually fell 2.7 percent.

AvalonBay Communities Inc., based in Arlington, Va., has raised rents by an average 6 percent in the past year. The company earned 11 percent more in rental revenue in the July-September quarter than in the previous quarter.

With nearly 54,000 units, AvalonBay is one of the largest apartment developers in the country. Nearly 96 percent of its apartments had been occupied by the end of September, according to its earnings reports.

The average rent at AvalonBay’s cheapest complex under construction, in Seattle’s Ballard neighborhood: $1,715. The builder completed 1,280 more apartments between July and September and started work on 933 others.

At Equity Residential, whose chairman is real estate magnate Sam Zell, rental income jumped 12.7 percent in the July-September quarter over the same period a year before.

Equity Residential is the nation’s largest apartment owner. Nearly 25 percent of its apartments are in Phoenix, Orlando and South Florida, which were hammered by the housing bust and where its average rents are the lowest.

Yet Equity’s properties there are faring well. The average rent for one of the company’s 9,300 apartments in Phoenix rose from $837 last year to $925 this year.

Zell, whose net worth is roughly $5 billion, has publicly extolled the prospects for his apartment business over his office and retail operations.

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Spain paid an interest rate of nearly 7 percent to raise euro3.56 billion ($4.8 billion) in an auction of 10-year bonds Thursday, the highest rate since 1997 and a level seen as unsustainable over the long term.

The finance minister insisted, however, that a bailout was out of the question and said Spain’s overall debt load _ about 70 percent of gross domestic product _ is manageable.

“The sustainability of our debt is beyond any doubt,” Elena Salgado told Cadena Ser radio.

She said the 2011 budget had allotted euro27 billion for debt interest payments and “even with all this tension we are going to spend 3 billion less.”

Salgado also said at least 12 of the 17 countries that use the euro are seeing their borrowing costs rise, so Spain is not a special case.

“We are seeing systematic attacks on our sovereign debt” the minister said. “Today it is Spain, yesterday it was Italy, the day before that it could have been Belgium, and tomorrow it could be any other country, even the ones considered central to the euro, such as Austria or France.”

Thursday’s rate of 6.97 percent compared with 5.43 percent in the last such auction Oct. 20.

Demand was relatively weak. The amount of debt sold came in under the euro4 billion maximum target set by the Treasury and the bid to cover ratio was 1 cheap payday advance.54, compared with 1.76 last time.

After the auction, yields on Spanish 10-year bonds shot up. In early afternoon they stood at 6.79 percent on the secondary market. That was 4.93 percentage points above the yield of the equivalent benchmark German bund.

Spain’s chapter of the European debt crisis has engulfed the campaign for Sunday’s general elections.

Opposition conservatives are expected to score a landslide win over the ruling Socialists, saddled with an economy that has 21.5 percent unemployment, posted zero growth in the third quarter and is not expected to improve much next year.

Spain is struggling to recover significant economic growth after enduring nearly two years of recession prompted in part by the collapse of a real estate bubble. It is the periodic focus of fears it will be the next eurozone country to require a bailout, after Greece, Ireland and Portugal.

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The economy of the 17-nation euro bloc avoided contracting in the third quarter, thanks mainly to Germany and France, but is widely expected to fall into recession imminently as a result of its raging debt crisis.

In its first estimate for the third quarter, the EU statistics office’s Eurostat, said Tuesday that the eurozone economy grew by a paltry 0.2 percent for the second quarter in a row.

And that is likely to be as good as it gets for some time, with economists predicting a recession in coming quarters. Consumers and governments are expected to spend less due to the uncertainty spawned by the debt crisis that is threatening to spiral out of control as it moves from relatively small economies like Greece to much-bigger Italy.

Forward-looking indicators, such as surveys of business managers, households and investors, have all disappointed recently.

“The economic slump will accelerate in the coming months,” said Christope Weil, an economist at Commerzbank. “The uncertainty caused by the sovereign debt crisis is lying like mildew upon the eurozone economy.”

The worry is that the slowdown will hurt governments’ ability to reduce their debt loads as state revenues shrink and interest payments pile up.

For now, the eurozone has managed to avoid a recession _ technically defined as two consecutive quarters of negative growth.

The data showed Europe’s two powerhouses Germany and France were still growing _ 0.5 percent and 0.4 percent _ during the July to September period as consumers continued to spend.

Tuesday’s figures did not include a number of countries, such as Greece, Ireland and Italy. Their preliminary figures are due later this month but are unlikely to cause much of a change in the headline rate payday advance.

How much longer Germany and France can keep the eurozone afloat, however, is debatable.

“Future growth prospects have deteriorated markedly since the summer, making a ‘mild recession’ more likely,” said Frederik Ducrozet, an economist at Credit Agricole.

Signs of a looming eurozone-wide recession were evident in the figures _ Cyprus, Portugal and, perhaps most surprisingly, the Netherlands, all contracted during the quarter.

“There is no reason for growth optimism,” said Ferdinand Fichtner of the German Economic Institute, DIW, warning that fourth-quarter growth is expected to be much slower as the bite of the eurozone crisis is felt.

“People are uncertain,” Fichtner told the news agency dapd. “That is poison for growth.”

When the debt crisis erupted in 2009, Europe’s economy was just recovering from its deepest recession since World War II largely on the back of Germany, the region’s biggest economy. Germany enjoyed a boom in exports and improved domestic demand, even as many in the eurozone struggle in the face of mammoth debts.

The eurozone’s third quarter performance compared poorly with those of its peers. Eurostat said the United States grew by a quarterly rate of 0.6 percent, while Japan boomed by 1.5 percent, though largely because it was making up for lost output in the aftermath of a devastating earthquake and tsunami.

The economy of the wider EU, which also includes Britain and Sweden, also grew by 0.2 percent.

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