Euro zone economy hits wall of worry, deflation concern

A wall of consumer and business angst is standing in the way of euro zone economic recovery and there are renewed signs of deflation in the bloc's biggest countries to worry the European Central Bank.
Data from across the 19-member currency bloc will put pressure on the ECB to take strong additional policy actions at its meeting in March on top of the unprecedented stimulus it is already giving.
Reports of falling prices in Germany, France and Spain along with an array of weak sentiment surveys for the bloc as a whole will also provide ammunition to those arguing that governments must now loosen their budgets to stimulate growth.
The data contrasted with some recent, tentative signs of revival and boosts from cheap energy and a competitive euro.
"The euro zone currently resembles a 50-year-old overweight smoker: there are a lot of downside risks, but the base case for the short term remains fairly decent," said Bert Colijn, economist at ING.

Even this modest confidence does not appear to be shared by businesses and consumers.
The European Commission reported that overall euro zone economic sentiment deteriorated by far more than expected in February, falling to 103.8 in...