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.

 

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

The path to a greener future begins in our cities

Can the EU afford to block China’s business openings to Europe by denying her the ‘market economy status’?

UNICEF urges governments to repatriate thousands of foreign children stranded in northeast Syria

Can indoor farming feed the world?

Coronavirus fears may have driven over 300,000 UK smokers to quit

EU Top Jobs summit ended with no agreement: welcome to Europe’s quicksand!

Is Europe misjudging its abilities to endure more austerity and unemployment?

How did Facebook fool the Commission that easily during the WhatsApp acquisition?

Summer 2018 Interim Economic Forecast: Resilient Growth amid increased uncertainty

EU leaders agree to delay Brexit until 31 October

Plants, the ‘core basis for life on Earth’, under increasing threat, warns UN food agency

Marking Sir Brian Urquhart’s 100th birthday, UN honours life-long servant of ‘we the peoples’

Commission deepens criticism on German economic policies

Guterres appeals for ‘maximum restraint’ over Jammu and Kashmir, as tensions rise

Why do medical students have to emigrate to become doctors in 2017?

JADE Spring Meeting 2015- Europe’s Junior Entrepreneurs together for 4 days of networking, workshops and forward thinking

This simple digital solution could streamline global travel and boost trade during COVID – here’s how

Understanding the challenge surrounding the Covid-19 vaccine campaign

EU should set goal to end homelessness by 2030

‘Score a goal’ for humanity, says Mohammed, celebrating winning link between sport and development

A new report outlines the shipping industry’s plans for decarbonization

Wednesday’s Daily Brief: Guterres in Kenya, Prisoners sick in Iran, #GlobalGoals, Myanmar, Ukraine updates, and new space partnership

The Shifting Rhythms of Harmonious China: Ancient, Modern & Eternal

Mobile Technology in Nowadays Medical Practice: Is It a Safe Path?

Lies and reality about incomes and wealth in the EU

Why the West supports the yen’s devaluation and Japanese over-indebtedness

Eurozone stuck in a high risk deflation area; Draghi expects further price plunge

FROM THE FIELD: Turning waste into a business in the slums of Yaoundé, Cameroon

2018 Sakharov laureate Oleg Sentsov receives his award

Imported and EU fisheries products should be treated equally

Why saving our forests should be a global priority

Unemployment and exclusion brings EU cities to boiling point

EntEx Organises 5 Summer Schools for Young Entrepreneurs across Europe in June/July 2014

MasterCard @ MWC14: Innovation in times of regulatory uncertainty

6 things to know about coronavirus today, 1 April

This Syrian national has been trapped at Kuala Lumpur airport for 3 months

Will Boris Johnson’s victory lead to a no-deal Brexit or is there still time?

The G7 should take the lead on ocean targets for 2020

Crucial medical supplies airlifted to north-east Syria to meet ‘desperate need’

From landlocked to land-linked: how the UN is helping some of the world’s poorest countries

4 steps to using AI in an environmentally responsible way

The financial future of Eurozone on the agenda of Friday’s ECOFIN council

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

Why do medical students need to emigrate to become doctors in 2017?

Brexit: European Commission intensifies preparedness work and outlines contingency action plan in the event of a no deal scenario with the UK

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

Team Europe contributes €500 million to COVAX initiative to provide one billion COVID-19 vaccine doses for low and middle income countries

An all-out fight for the EU budget

Libyan national conference postponed, nearly 500,000 children at ‘direct risk’ from fighting around Tripoli

If a virus could sing … Could this musical version of COVID-19 help us defeat the disease?

How electrification can supercharge the energy transition

‘Informing is not a crime’ UN chief calls for better protection of journalists, press freedom

Commission supports Member States in their transition to a climate-neutral economy

Closing the gaps in accelerating women’s rights: the role of medical students

Back to the Basics: Primary Healthcare

How can entrepreneurship tackle the migration crisis in the EU?

6 things to know about press freedom around the world

How to prevent a suicide?

UN food aid to Yemen will fully resume after two-month break, as Houthis ‘guarantee’ delivery

State aid: Commission approves €30 million Estonian measure to support Nordica in the context of the coronavirus outbreak

More Stings?

Advertising

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