Europe's growth forecast is lowered

"The slowdown in economic activity is compounding investors' concerns about debt sustainability," said Simon Tilford, chief economist at the CER in London. "In the south of Europe we have very high borrowing costs and no economic growth. That's a lethal combination."   Italy, for example, risks being forced into a vicious downward cycle if it has to make deep cuts in public spending to meet its creditors' demands, and the austerity measures plunge the country into a recession that reduces tax revenue, Mr Tilford said. ... So Mr Tilford argues that the eurozone’s healthier economies should be stimulating demand.