Eurozone slides into official recession for first time since ’09
Police officers protect themselves after receiving a projectile during a demonstration near the parliament building in Madrid during a general strike on November 14 in the evening. AFP photo
Modest German and French growth could not save the eurozone from seeing its second recession since 2009, according to official third-quarter data released Nov. 15.
The largest two economies of the 17 nations both managed 0.2 percent growth in the period between July and September. However, contraction in other leading economies such as the Netherlands, Spain, Italy and Austria pulled figures down, raising concerns over the utility of the austerity programs across the continent.
The full 27-state European Union eked out 0.1 percent growth, again after a contraction of 0.2 percent in the second quarter, escaping a technical recession, which refers to a shrinkage in the economy for two consecutive quarters, data from the Eurostat statistical service showed.
Economic output in the eurozone fell 0.1 percent in the quarter, following a 0.2 percent drop in the second quarter.
One day after strikes
Millions of workers went on strike across Europe a day earlier to protest the government spending cuts they say are driving the region into a deeper malaise but which Germany and the European Commission say are crucial to healing the wounds of a decade-long, credit-fueled boom.
Those two quarters of contraction put the eurozone’s 9.4 trillion-euro ($12 trillion) economy in recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.
A rebound in Europe is still far off. The debt crisis that began in Greece in late 2009 is still reverberating around the globe and holding back a lasting recovery from the Great Recession of 2008/2009 in much of the world.
“That was the last good number from Germany for the time being,” Jörg Kraemer, chief economist at Commerzbank, told Reuters. “The business climate... has caved in.” The zone is poised to enter an even deeper recession this year than feared, according to a European Central Bank report published yesterday. The bank’s quarterly survey of professional forecasters showed analysts now expect the 17-nation zone to shrink by 0.5 percent in 2012, compared to a previous estimate of a 0.3 percent contraction.
Forecasters have also halved their view of eurozone output for next year, Agence France-Presse reported. “The main factor behind the downward revision for 2012 was the prolonged uncertainty in the euro area, which was also reflected in weak economic indicators in summer and early autumn,” the report said. Most economists expect Germany to contract in the fourth quarter for the first time since the end of 2011. Where Germany goes, France is likely to follow and economists expect its economy to shrink in the period between October and December, Reuters said.
Spain, which has kept the eurozone on tenterhooks over a decision on whether or not to seek help from the eurozone rescue fund, is also in recession. It contracted 0.3 percent in the third quarter The Dutch economy shrank much more sharply than expected by 1.1 percent on a quarterly basis, the biggest drop in the quarter of any eurozone country. Austria’s economy contracted 0.1 percent. Greek Cyprus, the term chairman of the EU, shrank 0.5 percent.
Workers storm into consulate
ATHENS – Reuters
Greek workers stormed a meeting of Greek and German officials in the northern city of Thessaloniki yesterday and tried to attack a German diplomat in a protest over austerity measures.
Police used truncheons and teargas to disperse around 250 city employees after several burst into the building and ran swearing through its halls. Police said the protesters wanted to stop the meeting aimed at smoothing ties between Berlin and Athens. Police formed a shield around German Consul Wolfgang Hoelscher-Obermaier and fought off protesters who tried to attack him as he entered the building. Some demonstrators tried to pelt him with water bottles.