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.

 

 

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

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

Millions of Bangladeshi children at risk from climate crisis, warns UNICEF

Here are 5 security challenges Nigeria’s leader must tackle

Artificial Intelligence in policing: safeguards needed against mass surveillance

How the mobile industry is driving climate progress on the scale of a major economy

Mass measles vaccination campaign begins in Ebola-hit DR Congo province

ECB doesn’t dare touch Eurozone’s big banks

State aid: Commission approves €106.7 million restructuring aid and €30.2 compensation for damages suffered due to coronavirus outbreak in favour of French airline Corsair

What is inclusive capitalism, and why does it matter?

Member states must stop selling EU passports immediately, MEPs demand

What does the world really think about the UN Sustainable Development Goals?

Coronavirus: Commission waives customs duties and VAT on the import of medical equipment from non-EU countries

Education remains an impossible dream for many refugees and migrants

This is what the world’s CEOs really think of AI

Why the future of carbon should be blue

Mergers: Commission opens in-depth investigation into proposed merger of Cargotec and Konecranes

FROM THE FIELD: India’s plastic waste revolution

Commission study finds positive impact of trade agreements on agri-food sectors

EU Summit: Why was Poland isolated in opposing Tusk and the ‘multi speed’ Europe

Sudan: European Union provides €30 million in humanitarian assistance

Mergers: Commission approves DIC’s acquisition of BASF Colors & Effects, subject to conditions

Google once more under EU crossfire from a possible record fine and new Right to be forgotten case

Embracing technology as a service will fuel the circular economy. Here’s how.

Why responsible consumption is everyone’s business

State aid: Commission approves €3 billion Portuguese guarantee schemes for SMEs and midcaps affected by Coronavirus outbreak

Gender Equality in Medicine: are we now so different from the Middle Ages?

5 inventions that could transform the health of our ocean

On the Global Day of Parents, UNICEF is urging support for parents to give children ‘the best start in life’

Public Policies for LGBT in Brazil

Coronavírus SUS – Brazil’s official app for clear communication

Mergers: Commission clears acquisition of Fitbit by Google, subject to conditions

Microplastics have spread right to the sea bed, study finds

This is why Denmark, Sweden and Germany are considering a meat tax

Tourism offers much to the EU gets a little

1 in 5 deaths globally caused by fossil fuel pollution, a new study reveals

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

Businesses have a role to play in building vaccine trust. Here’s why

Ercom, cutting-edge Telco solutions from Europe

Big tech cannot crack down on online hate alone. We need to fund the smaller players

‘Global sisterhood’ tells perpetrators ‘time is up’ for pandemic of violence

5 ways you can protect insects if you live in a city

The 28 EU leaders unable to start a relevant debate on migration and Brexit

Zimbabwe facing man-made starvation, says UN expert

Families deserve answers when loved ones go missing in conflict: Security Council adopts historic resolution

The race for Driverless vehicles: where is the industry heading?

Tusk fights back while charismatic Boris goes against everybody in Brussels pushing the UK to leave the EU now or never

Delhi Declaration: Countries agree to make ‘land degradation neutrality’ by 2030, a national target for action

UN chief calls for ‘green and clean’ development in message for Africa Industrialization Day

7 amazing ways artificial intelligence is used in healthcare

3 reasons why most Africans aren’t on the internet – and how to connect them

Somalis ‘will not be deterred’ by Friday’s terror attacks – UN chief

State of the Energy Union: Progress made on the clean energy transition and a basis for green recovery

4 ways digitisation can unlock Africa’s recovery

Colombia: Rights experts condemn killing of reintegrated former rebel fighter, call for respect of peace process

Silk Road Unlimited

Coronavirus: harmonised standards for medical devices to respond to urgent needs

EU and Amazon cut deal to end antitrust investigation over e-books deals

How blockchain can manage the future electricity grid

Uzbekistan wins its long fight against malaria, as global rates continue to rise

Coronavirus: Commission unveils EU vaccines strategy

The Mental Health Hero in You

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