Eurozone retail sales fall shows recession

A European Commission dignitary visited a supermarket in Kraainem, Belgium. (EC Audiovisual Services).

A European Commission dignitary visites a supermarket in Kraainem, Belgium. (EC Audiovisual Services).

According to Eurostat, the EU’s statistical service, retail trade volume in February compared with January 2013 fell by 0.3% in euro area and remained stable in the EU27. However in comparison with the same month of 2012, the drop in retail sales was much larger. In detail, in February 2013 compared with the same month of 2012, Eurostat’s retail sales index dropped by 1.4% in the euro area and by 0.2% in the EU27. Evidently, the negative long-term tendency of this very important component of demand seems now irreversible.

The fall in retail sales volume is another strong indication that Eurozone is not coming out of its 18 month-long recession, as the €-coin index also shows. In view of that, the prospect of an interest rate cut by the European Central bank becomes even more probable. A reduction in the cost of loans is supposed to help consumer and investment demand to increase pace. But this will be felt some months after the ECB cuts down its basic rate from the present level of 0.75%.

The footprint of crisis

Presumably a reduction of ECB’s basic interest rate, say to 0.5%, that is 25 basis points lower may prove insufficient to create new growth dynamism. To be noted that the ECB changes its interest rates by ‘packages’ of 25 bp. For one thing it is highly questionable if such a small reduction in the cost of money to banks will act as an inducement for lenders to also reduce their own interest rates on consumer and business loans. Apart from that in the Eurozone countries under distress, and there are many of them, their banking systems systematically abate the overall volume of loans accorded to consumers and businesses. Unfortunately there is no indication that this is going to change soon.

Consequently such a small decrease in banks’ refinancing cost does not have the slightest chance to be felt by prospective borrowers. The deep national fragmentation of Eurozone’s financial markets leaves no doubt about this. On top of that, even in euro area countries with no financial market problems, like Germany and France, the overall economic outlook is rather bleak with a strong tendency towards recession, now engulfing them too.

Coming back to the retail sales volume the footprint of crisis is more evident in countries under in difficulties.  On a yearly comparison basis the largest falls were recorded in Greece, Spain, Portugal, and Estonia, and the highest increases in Luxembourg Latvia and the United Kingdom.

On the sectoral level in February 2013, compared with the same month of 2012, retail trade volume of “Food, drinks and tobacco” fell by 1.8% in the euro area and by 1.5% in the EU27. The non-food sector also lost 1.5% of its sales in the euro area and rose by 0.2% in the EU27.

 

 

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

What happens when the Eurogroup decides to help Greece

How Cameron unwillingly helped Eurozone reunite; the long-term repercussions of two European Council decisions

Trump aims trade offensive solely to China, renews truce with EU

5 neuroscience hacks that will make you happier

Brexit negotiations: back to square one, tougher words, no good faith

Cultural tolerance is a must: “No sir, I’m not inferior!”

Britain’s May won the first round on the Brexit agreement with the EU

The latest technology isn’t enough – you need the business model to go with it

A geared turbofan at Pratt & Whitney's production hub in West Palm Beach (copyright: Pratt & Whitney - a UTC Company- 2018; Source: Pratt & Whitney's website, media center)

The EU Commission approves UTC’s acquisition of Rockwell Collins under conditions

GSMA outlines new developments for Mobile World Congress Shanghai 2018

2014 will bring more European Union for the big guys and less for the weak

Force used against protestors in Gaza ‘wholly disproportionate’ says UN human rights chief

Mosul’s ‘3D contamination’ adds to challenges of deadly mine clearance work

Spain will soon overtake Japan in life expectancy rankings. Here’s why

Making technology work for 1.3 billion Indians

Eurozone slowly but surely builds its Banking Union

EU-China trade: closer ties as US-China trade battle brews

Youth unemployment: think out of the box

World in grip of ‘high impact weather’ as US freezes, Australia sizzles, parts of South America deluged

Facebook/Cambridge Analytica: MEPs pursue personal data breaches probe

EU Parliament: It takes real banks to fight unemployment and recession

Where is heading Putin’s Russia?

One Hundred Years of Qipao History: from Shanghai to EU

Syrian Government’s ‘different understanding’ of UN role, a ‘very serious challenge’ – Special Envoy

Connected Claims returns to London in 2018

Everybody against Japan over yen’s devaluation

JADE visits Lithuanian Junior Initiatives

EU Youth Goals – we are shapers not listeners

UN agriculture agency chief calls on world’s mayors to make ‘global commitments local realities’

Can one FTA and 110 lobby meetings make the dirty oil clean in Europe?

Climate change: cutting the good by the root?

Pakistan: UN strongly condemns terrorist attack that leaves scores dead and wounded at election rally

German banks suffer of nausea amidst rough seas

Food for millions in Yemen at risk of rotting in key Red Sea port, warns UN

How smart farming is helping Brazil feed the world

The Indian case: health policies need to keep pace with public health literacy

G20 LIVE: “International communities and leaders have great expectations for 2016 G20 summit in Hangzhou China”, Mr Wang Xiaolong, the Chinese Foreign Ministry’s special envoy stresses live from G20 in Antalya Turkey

Climate Change Revolution: by-laws for the world

Italy can stand the US rating agencies’ meaningless degrading

How the world can gear up for the fight against cancer

Theresa May expresses her optimism about Britain’s economic success while UK business outlook seems ominous

Investing in working conditions and quality jobs

Pharmaceuticals conceal drug side effects with the EU’s Court blessing

The migration crisis is slowly melting the entire EU edifice

Health Committee MEPs back plans to boost joint assessment of medicines

FROM THE FIELD: ‘Harvested’ rainwater saves Tanzanian students from stomach ulcers, typhoid

The EU pretends not knowing what happens in the Western Balkans

Philippe de Backer of ALDE at European Business Summit 2015 stresses: “Reinvent your business”

A Sting Exclusive: “The EU Cybersecurity Act for a more secure and cyber-resilient European Digital Single Market”, by EU Commissioner Gabriel

Australia urged to evacuate offshore detainees amid widespread, acute mental distress

EFSF/ESM boss tells half truths about Troika’s doings

The unpleasant truth of plastic straws

Brexit is happening now but the UK hasn’t really assessed the impact of a “no-deal” divorce

Central America: drought, resulting crop losses threaten food security of two million people, UN warns

Does Greece really weigh what is asking for today in Russia?

Give a chance to the brothers of Ailan: reception of refugees in Greece

E-energy declaration: will energy digitalization be beneficial to the climate?

Crimea: The last bloodless secession of a Ukraine region?

UN ‘comes together in sadness and solidarity’ to honour staff who died on board Ethiopian Airlines flight

Draghi: printing a full extra trillion non negotiable to help all borrow cheaply

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s