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Euro Crisis: Euro Zone Facing Double-Dip Recession

Euro Crisis: Euro Zone Facing Double-Dip Recession

The euro area economy contracted in the second quarter with gross domestic product for the seventeen-nation currency zone falling 0.2 percent from the first quarter. The seemingly ever-worsening debt crisis and continued rounds of budget cuts have led to recession in six euro zone countries and stoked fears that the entire euro zone could follow the UK into a double-dip recession.

Greece is in the fifth year of a recession and new data showed that the Spanish, Italian, Finnish and Portuguese economies are shrinking. Germany’s economy grew 0.3 percent and France’s, 0.0 percent (although this figure was reached by rounding up from -0.045 percent, meaning that its economy actually contracted).

Unemployment in Portugal rose to 15 percent. Out of a workforce of 5.5 million, 826,000 are now out of work.

Last month, euro zone consumer and business confidence fell for the fourth straight month, weakening especially in France, Germany, Finland and Austria. Industrial production has also fallen.

Nonetheless, as the contraction was smaller than expected, markets were cheered and share prices rose across Europe. But European leaders face an uphill effort to restore investor confidence in the face of layoffs by companies including Deutsche Bank (Germany’s largest lender), PSA Peugeot Citroen (Europe’s second-biggest carmaker) and RWE AG (Germany’s second-largest utility).

In the US, retail sales jumped 0.8 percent and, at $404 billion, were 4.1 percent higher than in the previous year. Companies including Home Depot and Estee Lauder reported higher net profits and the US housing market is albeit slowly, rebounding. But analysts emphasized that the recovery of the US economy remains fragile, though enough to keep the Federal Reserve from taking action when it next meets.

Given all this, it is no surprise to hear that Italians are saying farewell to luxury cars. In an era of austerity, la dolce vita can only become something a bit more bittersweet.

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Photo by Marshall Astor - Food Fetishist

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12 comments

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5:32AM PDT on Aug 22, 2012

thank you

care2 server problems=more clicks=money from advertisers

8:43AM PDT on Aug 21, 2012

the latest in the UK?
Cameron is proving to be Thatcher 2.0 as they are considering selling off council housing to raise money to build new homes.
Like the badger cull proposal, it didn't work before so why try it again.
I swear the coalition government have us on their knees while they sup champagne and caviar

4:25PM PDT on Aug 18, 2012

WE the people need to OCCUPY now. Rebel and revolt! Get the greedy CEO's to take responsibility, Wall Street crooks assets seized, Corporations investigated where they hide their off-shore accounts. There's $32 Trillion dollars in secret tax-free bank vaults worldwide. Seize all this money and distribute to the elderly, the homeless, the children and families who are in poverty. We need a world-wide revolution to combat injustice, militant aggression, slavery of the working poor and the disenfranchised.

12:15PM PDT on Aug 16, 2012

Serious business...

1:13PM PDT on Aug 15, 2012

Funny those who blame Obama for the debt crisis when it was their Congressman or woman who spent this country into bankruptcy. Three unpaid tax breaks for the rich, a Senior Drug Plan unpaid for, 2 unpaid for wars, bak bailouts with no strings. Don't blame others for your morons.

7:31AM PDT on Aug 15, 2012

It's not because of budget cuts. It's because of not enough budget cuts.

7:20AM PDT on Aug 15, 2012

Yup - those poor Europeans - they all have, or had, their own Obama's!

Will the bleeding heart liberal socialists learn from Europe?

No....

Perhaps they don't have brains?

6:07AM PDT on Aug 15, 2012

I wonder when the peoples of the world will wake up to the reality that successive Governments have provided services for us, which our children and grandchildren will have to pay for. That is debt and rolled over debt.Enjoying current consumption which we dont pay for but push the cost onto future generations.

Where is the morality and honesty in doing that?

Here today, gone tomorrow politicians are allowed by us to get away with it.

5:08AM PDT on Aug 15, 2012

Europe has always had problems with unemployment. Specially with young people. Now with the advent of these bubble economies, and consequential busts, it is even more accentuated.

4:00AM PDT on Aug 15, 2012

Actually, the real unemployment figures for Portugal are a lot higher than that. 15% is the number of people who are counted as unemployed. That number leaves out countless others who have given up on looking for a job and are therefore not counted in the statistics. The real number apparrently is around 1,3 million people, which is almost 25%. And it's about to become a lot worse, as thousands of teachers are going to be laid off in September.

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