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

the European Sting Milestones

Featured Stings

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

The Ukrainian crisis to destabilize Europe and the world for a long time

Impacting society with digital ingenuity – World Summit Award proclaiming the top 8 worldwide

MARKUP initiative to boost market access to Europe for East African SMEs

EU budget: Commission proposes most ambitious Research and Innovation programme yet

The Parliament paves the way for the creation of the European Banking Union

Syria: Why did the US-Russia brokered ceasefire collapse? What does the duo care for?

Libya: Attack on foreign ministry, an attack on all Libyans, stresses UN envoy

DR Congo elections: ‘Excessive use of force’ in campaign must be avoided, says Bachelet

ECB’s Draghi favours a cheaper euro to serve all Eurozone countries

How many more financial crises in the West can the world stand?

Cultural Intelligence: the importance of changing perspectives

Why the merchant ships can pollute the atmosphere with CO2 quite freely

Here’s how we can tackle the growing cybersecurity skills gap

70 years after the Universal Declaration of Human Rights, this is why we need dignity more than ever

How telehealth can get healthcare to more people

Why South Africa is on a path of economic renewal

G20 LIVE: The European Sting covers online world news and the latest developments at G20 from Antalya Turkey

US prosecutors now target Volkswagen’s top management, upsetting Germany

Hollande protects the euro from the attacks of extremists

UN rights experts call on Russia to release Ukrainian film-maker whose life is in ‘imminent danger’

‘Collective endeavour’ needed to strengthen peacekeeping further, says top UN official

Boom in Artificial Intelligence patents, points to ‘quantum leap’ in tech: UN report

Is Haiti better prepared for disasters, nine years on from the 2010 earthquake?

Eurostat confirms a dangerously fast falling inflation in Eurozone

‘Global care crisis’ set to affect 2.3 billion people warns UN labour agency

DR Congo: Ebola response resumes despite ‘risky environment’

All sides in Yemen conflict could be guilty of war crimes, UN experts find

Eurozone: The cycle of deficits, debts and austerity revisited

European Youth Capital 2019 announced: Novi Sad, Serbia

We have to fight for a fairer tech industry for women

European Banking Union: Like the issue of a Eurobond?

Capitalism’s greatest weakness? It confuses price with value

Trump to subject the Fed, challenge the ECB and make Wall St. bankers even richer

Restoring prospect of peace in Middle East is ‘our shared responsibility’ UN envoy tells Security Council

How banks should prepare for robots going rogue

Medical Education is #NotATarget

Armenia should take vigorous measures against entrenched corruption

The EU pollution rights trading system frozen

UN chief hails victory of ‘political will’ in historic Republic of North Macedonia accord

The EU Consumer Policy on the Digital Market: A Behavioral Economics View

European Commission adopts new list of third countries with weak anti-money laundering and terrorist financing regimes

The EU Commission implicates major banks in cartel cases, threatens with devastating fines

US-North Korea summit ‘an important milestone’ towards denuclearization, says Guterres

Migration crisis update: lack of solidarity not only among EU leaders but also EU officials

More urgency needed to help increasing numbers ‘locked out’, before 2030, says UN’s Bachelet

Solutions for cultural understanding: medical students’ perspective

“Our house is on fire.” 16 year-old Greta Thunberg wants action

Venice will now start charging tourists an entrance fee

Did Draghi ask the Germans to accept a drastic change of austerity policies?

Facebook and Google to treat Europe as the 51st State of the USA

How China raised the stakes for electric vehicles

The deforestation risks lurking in the banking sector

EU to lead one more fight against climate change at G7 summit

Trade, taxes and other takeaways from Li Keqiang’s speech to the World Economic Forum

How well you age depends on what you think of old age

Why Sweden’s cashless society is no longer a utopia

How and why Mercedes fakes the EU fuel consumption tests

Eurozone: Negative statistics bring deflation and recession closer

The Americans are preparing for the next financial crisis

The rise of alternative medical practices in modern sports

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