Eurozone: Even good statistics mean deeper recession

Olli Rehn, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro, gave a press conference on the 2013 spring economic forecast. (EC Audiovisual Services).

Olli Rehn, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro, gave a press conference on the 2013 spring economic forecast. (EC Audiovisual Services).

One after the other the main indicators of Eurozone’s economic health are deteriorating slowly but surely. Even positive statistical findings, like the March Euro area surplus in international trade of goods, having reached a record €22.9 billion, if looked more closely reveal a deepening recession of the internal economy, while the rest of the world has left behind the crisis years.

The most important indicator, the GDP evolvement keeps steadily losing ground. In detail GDP fell by 0.2% in the euro area (EA17) and by 0.1% in the EU27 during the first quarter of 2013, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. Eurostat also notes that, “In the fourth quarter of 2012, growth rates were -0.6% and -0.5% respectively. Compared with the same quarter of the previous year, seasonally adjusted GDP fell by 1% in the euro area and by 0.7% in the EU27 in the first quarter of 2013, after -0.9% and -0.6% respectively in the previous quarter”.

Coming to the crucial sector of construction, which offers many and well-paid jobs and accounts for a large part of GDP, the news are really depressing. Eurostat recently announced that “In the construction sector, seasonally adjusted production1 fell by 1.7% in the euro area2 (EA17) and by 1.1% in the EU27 in March 2013, compared with the previous month, according to first estimates released by Eurostat, the statistical office of the European Union. In February 20133, production declined by 0.3% in the euro area and remained stable in the EU27. Compared with March 2012, production decreased by 7.9% in the euro area and by 7.2% in the EU27 in March 2013”.

On an annual base the drop of production in this crucial sector indicates a real collapse. Unfortunately the fall is even larger in civil engineering, a construction subsector directly related to new infrastructure creation. Eurostat found that in February and in an annual base civil engineering fell by 11.3% in the euro area and by 8% in the EU27, after +2.8% and +0.3% respectively in the previous month.
The problem is not only this benchmark activity is retreating fast, feeding directly unemployment. The sector is obviously falling behind in infrastructure creation and general development works. These large losses mean that the European economic environment is falling behind, compared to main competitors in North America and South East Asia. Today’s delays in infrastructure mean fewer business investments in the future.

Another indicator which seems at first reading to offer positive news but in reality means deeper recession is inflation. Always according to Eurostat, “Euro area annual inflation was 1.2% in April 2013, down from 1.7% in March. A year earlier the rate was 2.6%. Monthly inflation was -0.1% in April 2013. European Union annual inflation was 1.4% in April 2013, down from 1.9% in March. A year earlier the rate was 2.7%. Monthly inflation was 0% in April 2013. In April 2013, the lowest annual rates were observed in Greece (-0.6%), Latvia (-0.4%) and Sweden (0%)”.

It is crystal clear that the more the recession is ravaging a country, the lower inflation indices it turns out. The case of Greece, with inflation at -0.6% and 20% losses in GDP, is very characteristic.

All in all recession has taken hold of Eurozone’s economy and it is even more worrying that there is no narrative or something like a plan to fight it. Germany insists that fiscal consolidation should continue. Unfortunately the other side, that is the ‘relaxationists’, do not seem to offer a structured answer, to counter Berlin’s Teutonic options. At least not yet.

 

Advertising

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

Amazon indigenous groups want to create a nature sanctuary the size of Mexico

UN’s Grandi slams ‘toxic language of politics’ aimed at refugees, migrants

New Syria fighting represents ‘giant powder keg’, warns aid veteran, as he leaves UN stage

Facebook wins EU approval for WhatsApp acquisition; just a sign of the times

Eurozone 2013: Where to?

“A Junior Enterprise is run only by students.. there are no professors or managers that can help you solve your problems”

The success story of a Chinese investment in the Greek port of Piraeus

These are the countries best prepared for the fight against cancer

Latin America’s cities are ready to take off. But their infrastructure is failing them

6th Edition of India m2m + iot Forum 2019 concluded, in association with The European Sting

Seven trends shaping the future of the mining and metals industry

The miserables and the untouchables of the economic crisis

These five exercise trends will help society and your health

Spending another 3 billion euros on Turkey feels better than admitting EU’s failure

European Commission and four online marketplaces sign a Product Safety Pledge to remove dangerous products

The great challenge of the 21st century is learning to consume less. This is how we can do it

‘Still time’ to stop a ‘bloody battle’ for Libya’s capital, insists Guterres

Four ways Europe can become a global innovation leader

Why Eurozone’s problems may end in a few months

Civil society organisations disenchanted with “Youth Guarantee”

International Day of the Midwife: 5 things you should know

Financial Transaction Tax: More money for future bank bailouts?

A Sting Exclusive: “Climate change and youth inaction: oblivion or nonchalance?”, AIESEC wonders from Brussels

4 bold new ways New York is going clean and green

UN recognises role of sport in achieving sustainable development

Finland, Switzerland and New Zealand lead the way at teaching skills for the future

Theresa May in search of a magic plan to invoke Article 50 and start Brexit negotiations now

Mind the (gender) gap: why we should stand together on inclusion

A Sting Exclusive: “China is Making Good Stories not Bad Ones”, Ambassador Yang highlights from Brussels

Merkel had it her way with the refugees & immigrants but can Greece and Turkey deliver?

India is failing 175 million of its young people. Here’s the solution

Mediterranean migrant drownings should spur greater action by European countries, urge UN agencies

Here are three key ways that data analytics can improve the workplace

Who is culpable in the EU for Ukraine’s defection to Russia?

‘Continue working together’ UN chief urges DR Congo, as country heads to polls

Can China deal with climate change without the U.S.?

How cities can lead the way in bridging the global housing gap

Is ECB helping Germany to buy cheaply the rest of Europe?

COP24: A million lives could be saved by 2050 through climate action, UN health agency reveals

UN chief welcomes Taliban’s temporary truce announcement, encourages all parties to embrace ‘Afghan-owned peace’

The 28 EU leaders care more about fiscal orthodoxy than effectively fighting youth unemployment

How Finland is fighting fake news – in the classroom

UN food agency appeals for access to key storage facility amid fight for Hudaydah

Why artificial intelligence is learning emotional intelligence

EU Directive makes haircut on uncovered deposits a standard in bank bail-ins

From Russia with love: Brussels and Moscow close to an agreement on Ukraine’s gas supplies

Seize the opportunities of digital technology to improve well-being but also address the risks

When will Eurozone’s unemployment rate stop being Europe’s worst nightmare?

FROM THE FIELD: Weather reports come to aid of Uganda’s farmers

The secret weapon in the fight for sustainability? The humble barcode

Terrorism diverts resources from ‘much-needed’ development to ‘costly’ security, warns UN envoy for Central Africa

Crime and drugs in West and Central Africa: Security Council highlights ‘new alarming trends’

MEPs call on EU countries to end precarious employment practices

MEPs cap prices of calls within EU and approve emergency alert system

Recession: the best argument for growth

There is a forgotten solution to climate change that we must invest in – nature

Tsipras imposes more austerity on insolvent Greece; plans to win new early election soon

Immigrant integration policies have improved but challenges remain

Satellites and data are going to help us phase out fossil fuels. Here’s how

What the Corn Laws tell us about Brexit Britain

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