Standard & Poor's believes there is a 40 per cent chance of a recession in the eurozone, whose economy could contract by up to 1.5 per cent this year, the US credit ratings agency said on Saturday.
"We are now forecasting a recession with a 40 per cent probability for this year," said S&P credit analyst Moritz Kraemer. "That could lead to a eurozone contraction of around 1.5 per cent", DPA reported
The agency warned eurozone countries that their efforts to fight the debt crisis was too focused on reducing debt.
S&P on Friday downgraded the debt ratings of nine European countries, including France and Austria, who were stripped of their prized top-notch triple A ratings.
The agency said a fiscal unity pact agreed at a European Union summit last month to tighten budgetary rules did not fully address the eurozone's financial problems.
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