Europe Flounders in Political Stalemate
The French and German economies both managed 0.2% growth in the July-to-September period but their resilience could not save the 17-nation bloc from contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.
Economic output in the Eurozone fell 0.1% in the Quarter, following a 0.2% drop in Q-2.
Those 2 Quarters of contraction put the Eurozone’s EUR 9.4-T, US$12-T economy back into recession, although Italy and Spain have been contracting for a year already and Greece is suffering an full on depression.
A rebound in Europe is still far off. The debt crisis that began in Greece in late Y 2009 is still reverberating around the globe and holding back a lasting recovery.
Analysts said even the Eurozone’s top 2 economies, Germany and France are likely to follow in the final 3 months of the year.
For the whole of Y 2012, the European Commission sees the Eurozone contracting 0.4%, while growing just 0.1% in Y 2013. Business surveys point to difficult times ahead and the public’s backlash to austerity policies are growing.
A poll of more than 70 economists predicted the bloc’s new recession will extend until the end of this year and Y 2013 promises little better than stagnation, in line with what the Commission is forecasting.
Conducted before Thursday’s data were released, the consensus was for a Y 2012 contraction of 0.5% and just 0.1% growth next year.
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-fueled boom.
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 2 more yrs to make the cuts demanded of it.
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Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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