New York, U.S.A. — Leaders of European Union member states are meeting in Brussels to discuss measures that might alleviate the financial crisis, and reassure stakeholders that the region and its weakest economies have a sound plan for restoring economic growth.

“Following today’s release of The Conference Board Leading Economic Index for the Euro Area, which fell for a third consecutive month (albeit at a slower pace), all eyes have turned to Brussels,” said Jean Claude Manini, The Conference Board Senior Economist for Europe. “The sharp deterioration in confidence suggests that output growth has fallen back into negative territory in recent months. If confidence in the economy and Europe’s financial situation cannot be restored quickly, economic activity may experience a deeper and longer contraction than currently projected.”

According to Bart van Ark, The Conference Board Chief Economist: “The latest EU summit represents a new and important opportunity to adopt a credible timetable of robust measures to get this crisis under control. The idea of a banking union is one of the most promising steps in the short term. While this would eventually involve accepting joint obligation for the debts of other member states in some form, if a bold and comprehensive process is identified, a gradual implementation might be acceptable for those involved in the decision making.”

Following months of rising financial market turmoil in the Euro Area, The Conference Board recently revised its projection for Euro Area GDP in 2012 down from -0.1 percent to -0.3 percent and also has made downward revisions to its forecasts for Spain, Italy, France, and the U.K. This morning’s release of The Conference Board Leading Economic Index for the Euro Area and The Conference Board Coincident Economic Index for the Euro Area provides additional evidence that the condition of the region’s economy is continuing to deteriorate.

To provide additional context regarding the challenges summit participants will be addressing, The Conference Board has released the June edition of its Economics Watch European View publication. This report contains details regarding our near-term forecast, a discussion of how member states may seek to reduce financial risk in the banking sector, and a detailed look at what the implementation of austerity measures could mean for the economies of Euro Area members.

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