Europe's economies showing weakness

LONDON - Europe's biggest economies are showing weakness, a sign that the struggles of their heavily indebted neighbors are spreading.

The central banks of France and Britain, Europe's second- and third-largest economies, made grim forecasts on Wednesday, while data from Germany, its largest economy, showed a weakening in manufacturing.

Europe - including the 17 countries that use the euro - has struggled for three years as economies face deepening recessions. Spain and Italy are threatened with a financial collapse and could soon join Greece, Portugal, Ireland, and Cyprus in seeking financial assistance. That would stretch the eurozone's already fragile economy to breaking point.

A continued recession in Europe would be felt around the world. Europe is the largest U.S. export customer. A fall-off in demand would hit order books, and jobs, in the United States. Companies around the world have recently warned that a continued contraction in Europe would hurt their bottom lines.

McDonald's, the fast-food chain, reported flat growth in its sales for July on Wednesday - pushed down, in part, by a 0.6 percent dip in meals served in Europe. The region accounts for 40 percent of McDonald's business.

Here's a look at economic conditions in Europe:

United Kingdom: The U.K.'s economy likely will stagnate this year, according to the Bank of England. In its quarterly Inflation Report released Wednesday, the U.K.'s monetary authority scaled back its forecast for 2012, saying the economy would not grow overall in 2012 in spite of returning to growth in the second half of the year. The country, though not a member of the euro bloc, has felt the effects of Europe's downturn and has been in recession since the last quarter of 2011.

Germany: Industrial production and exports in Germany dropped in June, highlighting concerns that Europe's debt crisis is weighing on the region's biggest economy.

Industrial production was down 0.9 percent in June from the previous month, the Economy Ministry said. That figure followed a 1.7 percent increase in May.

The German economy so far has been relatively unscathed by the debt crisis afflicting its eurozone partners. But second-quarter output figures due next week are expected to show growth slowing and business confidence fading.

France: France's central bank added a further note of pessimism Wednesday when it predicted the country would slip into recession in the third quarter.

The Banque de France said Wednesday that the country's economy was expected to contract by 0.1 percent in the third quarter. The bank had already said the economy would shrink the same amount in the second quarter.