Wednesday November 26, 2014 Search
Weather | Athens
12o C
9o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Eurozone falls into second recession since 2009

The debt crisis dragged the eurozone into its second recession since 2009 in the third quarter despite modest growth in Germany and France, data showed on Thursday.

The two leading economies both managed 0.2 percent growth in the July-to-September period.

But the resilience could not save the austerity-hit 17-nation bloc from overall contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.

Economic output in the eurozone fell 0.1 percent in the quarter, following a 0.2-percent drop in the second quarter.

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 2009is 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 Germany for the time being, said Joerg Kraemer, chief economist at Commerzbank. The business climate ... has caved in."

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 October-to-December period.

For all of 2012, the European Commission sees the eurozone contracting 0.4 percent, while growing just 0.1 percent in 2013. Business surveys point to difficult times ahead and the public's backlash to austerity policies is growing.

Millions of workers went on strike across Europe on Wednesday to protest the government spending cuts they say are driving the region into a deeper malaise but which Germany and the Commission say are crucial to healing the wounds of a decade-long, credit-fuelled boom.

"We are now getting into a double dip recession which is entirely self-made, said Paul De Grauwe, an economist with the London School of Economics. It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else, he said.

The Commission says the eurozone's economies will be much healthier overall next year than in 2009, which was the nadir of bloated budgets when Greece's fiscal deficit reached a record 15.6 percent and Ireland was not far off at 13.9 percent.

The threat of a eurozone break up has also diminished after the European Central Bank promised to buy eurozone government bonds in potentially unlimited amounts, should a country first seek help from the bloc's permanent rescue fund.

There have been fledgling signs the Italian economy is improving. Consumer confidence has risen and the pace at which industrial output has fallen is slowing.

Nonetheless, the country's acquired growth at the end of the third quarter stood at -2.0 percent, meaning that if GDP is flat in the final three months of the year, the economy will have shrunk by two percent over the year as a whole.

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. Tiny Cyprus shrank 0.5 percent.

Figures out earlier this week showed the Portuguese economy shrank 0.8 percent quarter-on-quarter while Greece tumbled further, casting doubt on whether Athens and its lenders can come up with a credible plan to put its finances back on track.

But EU policymakers seem aware that government spending cuts cannot keep up at the current pace, particularly after shocking suicides in Spain by people who had their homes repossessed.

Spain's Economy Minister Luis De Guindos has repeatedly called for EU-mandated budget cuts to take into account the eurozone's recession, while Greece has been given two more years to make the cuts demanded of it.

"The last couple of days have created a new momentum for a change in policy, because up until this week, social tension was not part of the equation, said Steen Jakobsen, chief economist at Saxobank. It seems like the tone has shifted dramatically. [Reuters]

ekathimerini.com , Thursday November 15, 2012 (15:11)  
Debtors snap up offer for easier settlements
Belgium gas firm said to be eyeing DESFA
OLP approval paves way for investment in Piraeus
Airport tender exceeds expectations
Hundreds of migrants on crippled ship off Crete
Ships from Greece rushed to help after a crippled freighter crammed with hundreds of migrants floundered for hours Tuesday in gale-force winds and high waves in the Mediterranean Sea, offici...
Policemen suspected of working at Piraeus bar where shooting took place
At least three serving policemen are thought to have been working at the bar in Mikrolimano, Piraeus, where a 31-year-old man opened fire with an AK-47 early on Saturday, resulting in 15 peo...
Inside News
SOCCER
Atletico eyes last 16 berth against Olympiakos
Greek champion Olympiakos faces a tough task if it is to prevent last season's beaten finalist Atletico Madrid sealing its passage into the last 16 of the Champions League at the Vicente Cal...
SOCCER
EPO ends soccer suspension, Super League resumes
Soccer action will resume this weekend after the Super League convened on Monday, elected a new president and alternate president and sent a letter to the soccer federation that assures it t...
Inside Sports
COMMENTARY
Beware of the fallen idols
Akis Tsochatzopoulos, a legendary figure of the Greek socialist movement, a man who came very close to taking over the party that governed the country for half of the time following the fall...
EDITORIAL
The hard truth
The coalition government must tell the truth to the Greek people, even if this entails admitting to mistakes made over the last few months. The countrys citizens are fully aware of how cruc...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Hundreds of migrants on crippled ship off Crete
2. Atletico eyes last 16 berth against Olympiakos
3. Debtors snap up offer for easier settlements
4. Belgium gas firm said to be eyeing DESFA
5. OLP approval paves way for investment in Piraeus
6. Airport tender exceeds expectations
more news
Today
This Week
1. Anastasiades to undergo heart surgery in the US on Dec 4
2. Cargo vessel carrying hundreds of migrants adrift southeast of Crete
3. Trade deficit widens by 8.7 percent during Jan-Sept period, says ELSTAT report
4. Two police officers among 9 arrested for drug trafficking
5. Fraport, Copelouzos offer highest bid for Greek regional airports
6. Stop Mediterranean becoming vast migrant cemetery, Pope tells Europe
Today
This Week
1. Double quake on Atalanti fault line rattles Greek capital [Update]
2. Biden heads to Istanbul amid tension over Cyprus EEZ violation
3. Give Greece a chance
4. Every age has its collaborators
5. Carlsberg takes control of Greek brewer Olympic Brewery [Update]
6. Scientists expand excavation of ancient Amphipolis
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.