Over the summer, there was optimism aplenty that Europe was finally on track for a period of positive (if only barely) economic growth that would slowly and surely gain momentum over the next couple of years — but the third-quarter reports are in, and unexpectedly, growth didn’t pick up quite as much as some euro-financiers and -economists were hoping. Third-quarter growth tumbled (can I even say tumbled when we’re talking about growth in the range of less than one percent? …I’m going with it) from the second quarter’s 0.3 percent rate to a mere 0.1 percent, and the eurozone is nowhere close to even breaking even with the productivity levels and number of jobs they had pre-2008. As the WSJ reports, this supposed recovery sure looks an awful lot like a recession for a lot of people:
The euro-zone economy’s recovery from its long slump lost its momentum in the third quarter, compounding fears that Europe could get mired in a “lost decade” of stagnation, joblessness and political discontent. …
In much of the Continent, a meager recovery feels like continued recession to many. Particularly in indebted countries of Southern Europe, households and governments are struggling to pay down towering debts from incomes that are under pressure. …
Gross domestic product in the 17-country euro zone grew only 0.1% last quarter, or 0.4% at an annualized rate, data published on Thursday showed. The rate of growth was down sharply from the second quarter, when policy makers and economists began to hope that the clouds were clearing for the troubled currency bloc.
The halting recovery indicates that the euro zone’s crisis hasn’t gone away but merely changed and risks becoming entrenched. …
Hardly any euro-zone country posted strong growth last quarter, belying talk of a two-speed Europe in which some are plowing ahead. Even Germany’s economy grew only 0.3% last quarter, or 1.3% annualized, as weak demand in Europe and patchy global growth hit its exports.
As ever, perhaps one of the worst side effects of this never-ending euro debacle is not merely the terrible unemployment rate stuck at a record high of more than twelve percent for the entire zone, but the many unemployed youths who have paid-for college degrees yet somehow can’t seem to get their lives started:
European leaders pledged on Tuesday to make fighting youth unemployment in the bloc a priority but came up with no new ideas to tackle a problem that risks fuelling social unrest and distrust of mainstream parties.
Nearly 6 million people under the age of 25 are without work in the European Union, with jobless rates among the young at close to 60 percent in Spain and Greece. …
“It’s crucial to act quickly,” Hollande said. “We can’t abandon a generation … we need jobs and training that offer young people real prospects.”
And speaking of France, their economy by itself contracted by one tenth of a percentage point in the third quarter, which is definitely not going to do anything to help Hollande’s domestic popularity — and according to at least one report, a lot of French people are quickly losing patience with their Socialist president and his high-tax, low-growth regime. Disgruntlement is running high, via the Irish Times:
A secret document leaked to Le Figaro newspaper explains why President François Hollande caves in to the slightest sign of street protest.
“Throughout [French] territory . . . society is in the grip of tension, exasperation and anger,” says the ministry of the interior’s monthly summary of reports from 101 prefects, dated October 25th.
The corps of prefects was established by Napoleon in 1800 to be the central government’s eyes and ears in the provinces. The prefects are graduates of the elite École Nationale d’Administration and are considered neutral public servants.
The monthly reports are usually couched in careful, and sanitised language, which makes the blatant warning to the interior minister and president all the more alarming. “The legitimacy of tax” is now widely questioned, it notes. “This mix of latent discontent and resignation erupts through sudden bouts of anger, almost spontaneous, and not within structured social movements.”