Womp: Eurozone dragging into its sixth straight quarter of recession
posted at 9:21 pm on May 15, 2013 by Erika Johnsen
With no signs of recovery in sight for many of the eurozone’s member countries, the currency bloc’s collective economy has hit a new low with depression-esque conditions percolating across part of the region and Germany’s number-one economy only ‘growing’ by a stagnation-level 0.1 percent. Ouch, via Reuters:
Falling output across the bloc meant the 17-nation economy is in its longest recession since records began in 1995.
It shrank 0.2 percent in the January to March period, the EU’s statistics office Eurostat said on Wednesday, worse than the 0.1 percent contraction forecast by a Reuters poll.
“The misery continues,” said Carsten Brzeski, a senior economist at ING in Brussels. “Almost all core countries bar Germany are in recession and so far nothing has helped in stopping this downward spiral.
As well as France, the economy shrank for the quarter in Finland, Cyprus, Italy, The Netherlands, Portugal and Greece. Data last month showed Spain’s economy contracted for a seventh consecutive quarter.
Germany, which generates almost a third of the euro zone’s economy, grew by a weaker than expected 0.1 percent, skirting the recession that France succumbed to, but highlighting the devastating impact of the euro zone’s debt and banking crisis that has driven unemployment to a record 19 million people. …
French growth has faltered as unemployment undermines the confidence of both consumers and businesses, which are struggling to cope with government belt-tightening while Spain remains deep in the mire.
I’d wager that Socialist French President Francois Hollande is in a world of hurt right now; the already deeply unpopular leader has made promise after promise about how he’ll fix the unemployment crisis and put France’s economy back on the straight and narrow, and while it will of course be all the fault of the unfair restrictions unfairly placed upon him by the unfair EU, he has a serious crisis of confidence on his hands at home:
In only his second press conference since assuming power, Mr Hollande on Thursday faces the Herculean task of convincing France he has the antidote to the dark mood sweeping France.
Mr Hollande will insist – as he did yesterday – that the “worst is over” for the economy and that his reform programme is on track. …
Gross domestic product contracted 0.2 per cent, after shrinking the same amount in the last quarter of 2012. Mr Hollande also admitted that growth would be likely be “nil” in 2013 while unemployment is at an all-time high of 3.2 million.
On Wednesday during talks in Brussels, Mr Hollande was grudgingly given another two years to bring government spending under control but only on the condition he carries out radical economic reforms.
According to polling data just released from Pew, support for the European Union and the common currency is quickly souring across much of Europe; Germans are still feeling generally okay about it, but elsewhere and most especially in France, that support is falling away as more and more people are getting fed up with the failed project.
Support for European economic integration – the 1957 raison d’etre for creating the European Economic Community, the European Union’s predecessor – is down over last year in five of the eight European Union countries surveyed by the Pew Research Center in 2013. Positive views of the European Union are at or near their low point in most EU nations, even among the young, the hope for the EU’s future. The favorability of the EU has fallen from a median of 60% in 2012 to 45% in 2013. And only in Germany does at least half the public back giving more power to Brussels to deal with the current economic crisis. …
The prolonged economic crisis has created centrifugal forces that are pulling European public opinion apart, separating the French from the Germans and the Germans from everyone else. The southern nations of Spain, Italy and Greece are becoming ever more estranged as evidenced by their frustration with Brussels, Berlin and the perceived unfairness of the economic system.