BBC News | September 11: One year on

European economic growth was slow before 11 September, and suffered from the same blows to confidence and financial markets that affected the USA. Despite several rate cuts by the European Central Bank, recovery has been weak. The slowdown has been worst in Germany, the largest economy in the eurozone, where unemployment is rising and business confidence dropping. Growth is not expected to recover until later in the year, and growing government budget deficits may lead to cuts in public services. Growth has been stronger in peripheral countries like Ireland and Spain, but inflation is higher.

BBC News Online business reporter James Arnold explains how Europe has failed to become the new engine of world growth.

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Key Facts

Economic Growth: Q2 2001: 0.1%, Q1 2002: 0.3%

Unemployment: August 2001: 7.4%, June 2002: 7.7%

Interest rates: August 2001: 4.25%, August 2002: 3.25%