Sep.24 - German business sentiment drops for a fifth successive month to its lowest level since early 2010, applying fresh pressure on Spain to submit to a rescue programme. Ciara Sutton reports.
A news blackout in Greece as journalists take to the streets over government cuts. No state-run tv bulletins were broadcast and no government-owned newspapers published. But for the rest of the euro zone, the news did arrive and it was grim. German business sentiment dropped for a fifth successive month to its lowest level in two years. The ECB's plan to buy the bonds of weak euro zone states has failed to convince firms the worst is behind them. Tough austerity measures in many European countries have also weakened demand for German exports. Nick Parsons from NAB Group says it's no surprise. (SOUNDBITE) (English) HEAD OF MARKETS STRATEGY AT NAB GROUP, NICK PARSONS, SAYING: "Germany is the capital goods exporter to the world. And when we've got a slow down in China's investments, slowdown in China's GDP, and also a slowdown in China's consumption. Then it's no surprise really that Germany begins at some point to feel that pain." Spain is currently in the eye of the storm - and the poor German data could make an early bailout request more likely The prospect of more reforms isn't going down well in Spain. The government has agreed to a loan for its banks - now thought to the around 60 billion euros. But it's still insisting it won't rush into seeking a bailout despite market pressure. Many investors see the start of a new ECB bond buying programme, which would be triggered by a request, as the possible beginning of the end of the debt crisis. James Ashley from RBC Capital Markets says they may need to be patient. (SOUNDBITE) (English) JAMES ASHLEY, SENIOR EUROPEAN ECONOMIST, RBC CAPITAL MARKETS, SAYING: "Presumably the reforms from the Spanish government, the structural reforms that have been agreed behind the scenes with the European Union. The pressure really comes on again next month when we have the euro group meeting, and the European Council meeting where I think we might see Spain capitulate, we might see some sort of aid package come on stream then." European shares and the euro took a hit in early trade. And the spotlight is likely to remain on troubled euro zone states. Spain presents its 2013 budget on Thursday, and talks will resume between Greece and the troika. Ciara Sutton, Reuters.