-ECB President Draghi sees risks to Eurozone economy
-Italy braces for election
-Germany's economy expected to grow


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European equities finished mixed Monday as European Central Bank President Mario Draghi said economic indicators signalled further weakness in the Eurozone.

Draghi said he sees risks to Europe's economy despite a forecast of recovery in the latter half of this year.

"Available indicators signal further weakness at the beginning of 2013, with domestic demand remaining dampened," he said in a statement before the European Parliament's Committee on Economic and Monetary Affairs in Brussels.

"This is due to weak consumer and investor sentiment and to the necessary balance sheet adjustments in both the public and private sectors. Foreign demand also remains subdued."

It comes ahead of the European Commission's economic forecasts next Friday which will include individual countries' deficit targets.

Analysts expect Brussels to ease the requirement for Spain down to 4.8% of 2013 GDP (gross domestic product) which would imply a 1.8 percentage point reduction to the unofficial figure expected to have been reached last year.

Italy readies for elections

Markets are bracing for Italy's elections on February 24th and 25th.

Recent polls have shown a victory for the pro-European centre-left that would most likely form a government with the current Prime Minister Mario Monti's group.

However, Credit Suisse pointed out that there are "several alternative and sub-scenarios that cannot be dismissed" and the "Italian elections remain a significant risk event".

The last polls undertaken before the survey blackout period began on February 9th gave centre-left leader Pier Luigi Bersani a 5.7% lead over Silvio Berlusconi's centre-right coalition. Italian comedian Beppe Grillo held third place with Monti's group running fourth.

Germany economy to grow, new report reveals

Germany's economy is expected to register growth in the first quarter following its contraction at the end of last year, according to Bundesbank's monthly report for February.

The German central bank said there have been "increasing signs in recent months that the global economy is gradually picking up momentum" and pointed out that economic expectations in Germany have recovered "to a remarkable degree over the past three months".

The Bundesbank explained that the "marked turnaround in sentiment" was due to the reduced levels of uncertainty in the Eurozone.

It also affirmed that "an increase in overall economic output can be expected in the first quarter of 2013", basing its argument particularly on the improvement in the German industrial sector.

Kabel Deutschland shares rise on Vodafone bid

Carlsberg shares fell after its fourth quarter earnings of 2.15bn kroner missed analysts' forecasts.

Kabel Deutschland Holding advanced following reports Vodafone Group may approach Germany's largest cable providerabout a potential takeover bid as early as this week.

Novozymes tumbled after UBS AG cut the world's biggest maker of enzymes used in washing-machine powder to 'sell' from 'neutral'.

ITV rose on continuing speculation that the group is close to a takeover.

Natixis posted the biggest gain three-and-a-half years after announcing a €2.0bn exceptional payment to shareholders.

Anglo American was lower following news of more strikes and violence at Amplats, its South African division, along with comments from Credit Suisse, which said it expects the company's net debt to climb.

Other asset classes fall

The euro/dollar dropped by 0.07% to the 1.3351 dollar mark.

Front month crude futures fell by 0.051 dollars to the 117.720 dollar per barrel mark on the ICE.

RD

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