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

Advertising

the European Sting Milestones

Featured Stings

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

‘Business as usual’ will not achieve global education goals

ECB to support only banks not Peoples

COP21 Breaking News_12 December: The New Draft Agreement!

French Prime Minister passes Stability Program and takes his ‘café’ in Brussels this June

Stress, overtime, disease, contribute to 2.8 million workers’ deaths per year, reports UN labour agency

Chinese Premier Li Keqiang’s speech from World Economic Forum’s Annual Meeting of New Champions

Should we be worried about third-hand smoke?

Online radio and news broadcasts: Parliament and Council reach deal

Uncovered liabilities of €5 billion may render EU insolvent

Nicaragua must end ‘witch-hunt’ against dissenting voices – UN human rights experts

Reintegrating former rebels into civilian life a ‘serious concern’ in Colombia: UN Mission chief

2019 Innovation Scoreboards: The innovation performance of the EU and its regions is increasing

Solitary Britain sides with US aggressing Russia and chooses hard Brexit

Yellen and Draghi tell Trump and markets not to expedite the next crisis

ECB: Growth measures even before the German elections

Is Germany yielding to pressures for more relaxed economic policies?

Google and Apple suddenly realise that doing business in EU is tough?

Neither side stands to benefit in US-China trade spat, UN says

Can green bonds help us manage climate risk?

6 things to know about press freedom around the world

4 essential qualities for digital leaders

UN highlights profound implication of population trends on sustainable development

Nigeria: Top UN officials say more support needed to ease humanitarian crisis and rebuild lives in conflict-ravaged north-east

EU finally agreed to cut roaming charges in 2017 but criticism is always there

Checks, fines, crisis reserve: MEPs vote on EU farm policy reform

Wednesday’s Daily Brief: Diplomacy for Peace Day, #VaccinesWork, the cost of war on Afghans, tech and well-being

EU Council approves visa-free travel for Ukraine and cement ties with Kiev

Commission threatens Chinese firms with trade penalties

A Sting Exclusive: “eHealth can change many dimensions of how the healthcare area functions”, Polish MEP Michal Boni underscores from Brussels

Africa-Europe Alliance: European Commission committed to a sustainable African agri-food sector

The Fourth Industrial Revolution can close the digital divide. This is how

Polish PM chooses to focus on economy, amid questions on rule of law in Poland

Jellyfish are taking over the world – and climate change could be to blame

UN Chief ‘strongly rejects’ Guatemala decision to expel anti-corruption body

Time to measure up: 5 ways the fashion industry can be made more sustainable

Now is the time to seize ‘unprecedented opportunity’ of the Sustainable Development Forum, says ECOSOC President

ECB’s billions fortify south Eurozone except Greece; everybody rushes to invest in euro area bonds zeroing their yields

New UN Syria envoy pledges to work ‘impartially and diligently’ towards peace

Impact of high debt levels on least developed countries ‘cannot be overstated’, says UN

Humanitarian visas would reduce refugees’ death toll

How a more integrated approach could help to end energy poverty

More needs to be done to bridge the digital gender divide

How Finland is fighting fake news – in the classroom

These countries have some of the highest voter turnout in the world

EUREKA @ European Business Summit 2014: A European patent system can help European businesses lead industrial research and innovation on a global scale

Human trafficking cases hit a 13-year record high, new UN report shows

European Youth, quo vadis?

Food supply chain: A step closer to ending unfair trading

Good grub: why we might be eating insects soon

In dreams and in love there are no impossibilities

Why the ECB had to clarify it caters for the entire Eurozone not just Germany?

Moscow’s Eurasian Union lost significance after the crisis in Ukraine

Yemen war: UN chief urges good faith as ‘milestone’ talks get underway in Sweden

Why and how did ISIS and Muslim fundamentalism gain momentum this year?

A new era of computing is coming. How can we make sure it is sustainable?

How the world’s best teacher is changing lives in Africa

Human rights: breaches in Iran, Saudi Arabia and Sudan

EU to Google: How to dismantle European search engines in 13 steps

New UN bullying report calls for ‘safe, inclusive’ schools for all children

Guterres censures terrorist attacks in Nigeria, pledges UN ‘solidarity’

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