European consumer confidence dropped the most in 20 years this month. The European Commission said the decline was steeper than the one after Lehman Brothers collapsed in 2008.

The Commission said its consumer confidence indicator fell 5.4 points to -16.6 in August.

The Irish TImes said the sharp deterioration to the lowest level since June last year suggested the euro zone debt crisis and worries about global prospects have darkened the economic mood even more than economists had feared.

The Times also reported manufacturing in Europe has contracted for the first time in two years. It cited surveys that indicate economic growth across the region will remain at near stagnation. Separately, purchasing managers' indices showed private sector activity barely rose in August as German prospects weakened again, adding to the difficulties facing the region's leaders as they try to restore confidence in the monetary union.

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