The good news: The eurozone economy has probably stopped contracting. The bad news: It isn’t really going to grow, either.

posted at 10:01 pm on August 13, 2013 by Erika Johnsen

I know, I know — with all of the rampagingly available employment opportunities, competitive tax and regulatory environments, and successful taming of out-of-control debts and deficits of broke governments, you might have been tempted to think the eurozone was in the clear and due for some robust economic growth any day now. I suppose we’ll just have to train ourselves to expect the unexpected.

Via Reuters:

The euro zone has probably escaped from its lengthy recession, although there is little prospect the economy will start growing again at a healthy rate before 2015, according to a Reuters poll of 30 economists.

Respondents were almost unanimous that data on Wednesday will show the euro zone economy stopped contracting from April through June for the first time since the end of 2011. The consensus showing modest growth of 0.2 percent on the quarter. …

Still, few expect any kind of significant upturn from here.

The median outlook suggested euro zone gross domestic product (GDP) growth is unlikely to exceed 0.4 percent in any quarter from now until 2015.

The WSJ says much the same thing:

While the end of contraction can help support confidence among consumers and businesses, building momentum for the bloc’s economy, the 0.2% expansion that is expected pales in comparison with the 1.5% loss of output suffered over the previous six quarters. That period is dwarfed by the 5.7% fall in GDP the euro zone experienced in 2008 and 2009. The legacy of these two contractions is a record level of unemployment that is likely to take a long time to fall, meaning a persistent burden on public finances.

It’s hard to believe it can get much worse when mere stagnation-level economic growth is practically a celebratory event… but it probably can.

I might ask what it is, exactly, that is supposedly going to change come 2015, except that states will be even deeper in debt and deeper enthralled in convoluted bailout packages on which they repeatedly fail to make the agreed-upon payments? Will anyone have made any substantive moves toward actually fixing the barely-functioning economic, political, and institutional conditions under which Europeans are struggling in real material misery with few opportunities? I have a terrible premonitory feeling that the European debt crisis is much more dormant than it is extinct, and worse still, the United States doesn’t seem determined to do too much better.


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Comments

Spending other people’s money is such a wonderful thing..
Ain’t it?

Electrongod on August 13, 2013 at 10:03 PM

Welcome back Erika. Hope your time was well spent. ; )

Bmore on August 13, 2013 at 10:04 PM

…JugEars is in the Vineyard…and doesn’t care!

KOOLAID2 on August 13, 2013 at 10:04 PM

Lies to keep investors from fleeing the sinking ship of Europe.

Rebar on August 13, 2013 at 10:05 PM

I have a terrible premonitory feeling that the European debt crisis is much more dormant than it is extinct, and worse still, the United States doesn’t seem determined to do too much better.

Well stated. Unfortunately.

KCB on August 13, 2013 at 10:09 PM

Well, Finally!! We are Europe!!

socalcon on August 13, 2013 at 10:10 PM

OT, I keep seeing Trump’s name showing up again. Just Damn….!!!!

KCB on August 13, 2013 at 10:11 PM

Probably stopped contracting. Actually stopped contracting, not likely after the final tallies.

astonerii on August 13, 2013 at 10:11 PM

I might ask what it is, exactly, that is supposedly going to change come 2015

Nothing, except that by then, everybody will have forgotten what they were saying now in 2013.

trigon on August 13, 2013 at 10:20 PM

Meg got AP tied up?

davidk on August 13, 2013 at 10:20 PM

The good news: The eurozone U.S. economy has probably stopped contracting. The bad news: It isn’t really going to grow, either.

FIFY.

PappyD61 on August 13, 2013 at 10:23 PM

…cat being ransomed?

KOOLAID2 on August 13, 2013 at 10:23 PM

…cat being ransomed?

KOOLAID2 on August 13, 2013 at 10:23 PM

Probably asking twelve.ninetyfive.

I got a quarter.

davidk on August 13, 2013 at 10:27 PM

Pay no attention to the fact that the Cyprus bailin just upped the haircut on depositors to 47%.

JimK on August 13, 2013 at 10:37 PM

Just borrow and print and spend…that’ll fix it. Ask Brayam.

CW on August 13, 2013 at 10:39 PM

KCB on August 13, 2013 at 10:11 PM

Lefties stoke his ego, so Repubs appear re-tarded.

socalcon on August 13, 2013 at 10:40 PM

I have a terrible premonitory feeling that the European debt crisis is much more dormant than it is extinct, and worse still, the United States doesn’t seem determined to do too much better.

.
Oh, Erika …

… ever the optimist …

http://www.zerohedge.com/news/2013-08-13/us-treasury-finally-admits-truth-its-all-pomo-and-no-one-dares-fight-fed

http://www.zerohedge.com/news/2013-08-13/deutsche-bank-hopes-not-all-margin-calls-come-once-case-sell

And lest any Pollyanna out there is about to quote Krugman or any of the media circus clowns …

… go look at the 10 week rolling average volume of the various markets which despite a multi-year downward trend has seen something “new” over the last five sessions – the major indices having down days at the same time as the overall volume is collapsing.

What happens to markets when they experience the equivalent of a “vapor lock” on the fuel line to your car’s engine?

Hint: Ben Bernanke knows and it is one of the reasons he won’t be at the Fed’s annual Jackson Hole Summit for Central Bankers – even though he is Chairman of the Federal Reserve and the host of the party.

PolAgnostic on August 13, 2013 at 10:45 PM

Waiting for JustTheFacts to show up and tell us all Europe’s problems can be solved by raising the minimum wage. It’s a cure-all doncha know.

ReaganWasRight on August 13, 2013 at 11:20 PM

Minor typo: “It’s hard to believe it can get much worth “

WitchDoctor on August 14, 2013 at 12:15 AM

On second thought, possible pun usage I was too dense to get the first time…

WitchDoctor on August 14, 2013 at 12:15 AM

All bleeding stops…eventually.

Eurozone is running out of blood.

Waiting for JustTheFacts to show up and tell us all Europe’s problems can be solved by raising the minimum wage. It’s a cure-all doncha know.

ReaganWasRight on August 13, 2013 at 11:20 PM

The mods have gone past weenie status to just don’t care territory. I’m hereby doubling the reward for the poster who shuts him down permanently, and I don’t care or want to know how.

MelonCollie on August 14, 2013 at 12:59 AM

Heh.

Reuters was at one time a serious news-gathering and reporting organization. But, I show my age!

The fact remains that unemployment in the Euro-zone is high and rising and shows no signs of reversing anytime soon. What you have is a quiet period among the debtor nations. It doesn’t mean any problems have gone away in Greece or Spain or Italy. Or France.

And it certainly doesn’t mean the over $1 trillion (and as much as $3 tril) in bad debt still being carried as assets on the balance sheets of EZ banks is going to be repaid. It will not. It will be written off.

Adjoran on August 14, 2013 at 3:38 AM

Easy Erika.

2015 is the year they expect their immigrant muslim populations to finally produce more children than “native” Europeans are dying off now.

The wars in Libya and Syria are merely stimulus programs.

WryTrvllr on August 14, 2013 at 4:04 AM

it can get much worth

?? I agree with you, but you should work on that lithp.

Squiggy on August 14, 2013 at 5:38 AM

The good news: The eurozone economy has probably stopped contracting. The bad news: It isn’t really going to grow, either.

Yeah, and the Titanic “probably” stopped sinking. In reality, it’s just kinda floating around out there somewhere. When they find it, they’ll refit it and it will be better then evah!

Dr. ZhivBlago on August 14, 2013 at 5:54 AM

I figured they wouldn’t hit bottom until they’d turned to cannibalism like they did during the Hundred Years War.

apostic on August 14, 2013 at 6:18 AM

Lets see what was the last stuff I bought from any Nation in the Eurozone?

Hmmm… know I got some sauerkraut from Poland… coffee from Denmark… but… hmmmm… that was years ago… lately? Machine screws! Some damn piece of equipment needed a machine screw commonly found on Euro biking equipment and I couldn’t even find a Chinese supplier for them! That was last year. At least the screws were properly made… hard to mess up with automated equipment, really… although I think it was a small shop in France that did them. They probably had to shut down because they made money.

Europe isn’t going to recover until the EU is liquidated and countries get to figure out just how they will afford their promises to their people. Which makes for fertile ground for the present and growing Tea Parties in Europe. Amazing how that idea of liberty landing in places that have never seen it can get people to adhere to it. Almost like magic or something. Personal responsibility for oneself means you trust government less and depend on it less and want less of it. Strange ideas for Europe which loves to fight wars over who pays, instead… maybe, this time, something different will happen… feel sorry for the small businessman in the EU, though. They are forced to bear the burden of the promises and, because of that, the economy never really recovers. Shame that. Maybe they will start looking at this liberty and freedom business some day.

ajacksonian on August 14, 2013 at 7:02 AM

Our inglorious future, courtesy of Dear Leader…

Pest on August 14, 2013 at 10:57 AM