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

the sting Milestone

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

Ebola emergency chief decries new attacks on frontline staff, after DR Congo worker death

EU Commission and ECB rebuff Germany on the Banking Union

Disillusioned young people – France thinks it has a solution

Address by the President Antonio Tajani at the funeral of Nicole Fontaine

Governments need to honour their climate pledges as risks grow

Will Merkel ever steer the EU migration Titanic and restore her power in Germany?

South Asia can become an innovation hub. Here’s how

Africa’s inspiring innovators show what the future could hold

‘Business as usual’ will not achieve global education goals

How much is nature worth? $125 trillion, according to this report

Aung San Suu Kyi appears at ICJ as UN rights expert urges greater protection for Myanmar activists

Clean air is good for business

One year on: EU-Canada trade agreement delivers positive results

Intel @ MWC14: Our Love Story with Mobile – Transforming Wireless Networks

Humanitarian Aid: EU allocates €55 million in Sudan

Insurer CEOs Reveal Marketing Strategies that Communicate the True Value of Insurance Products & Services to the Customer

Security Council welcomes Yemen breakthrough, but lasting peace remains a ‘daunting task’

Four million Syrian children have only known war since birth: UNICEF

Draghi tells the EU Parliament his relaxed policies are here to stay

In Chad, top UN officials say humanitarian response must go ‘hand in hand’ with longer-term recovery

Mosquitoes kill more people every day than sharks do in a century

Earthquake: Monte Dei Paschi Di Siena

A renewed agenda for Research and Innovation: Europe’s chance to shape the future

European Youth Forum welcomes adoption of Sustainable Development Goals and calls on European countries to not ignore them!

EU budget: Making the EU fit for its role as strong global actor

Protests, violence in Haiti prompts international call for ‘realistic and lasting solutions’ to crisis

Spotlight Initiative – EU and UN fight against domestic violence in the Pacific region

Colombia: Santos thanks the EU for its support to the peace process

New malaria vaccine trial in Malawi marks ‘an innovation milestone’, declares UN health agency

Bangladesh: Head of UN refugee agency calls on Asia-Pacific leaders to show ‘solidarity’ with Rohingya refugees

3 reasons we should all care about biodiversity

AIESEC Vlog

Nearly a third of the globe is now on Facebook – chart of the day

UN chief ‘alarmed’ by violations of UN-backed ceasefire in Libya

Brussels Vs. Google: The €1 bn EU fine and the US response

Crimea: The last bloodless secession of a Ukraine region?

African migration: what the numbers really tell us

This Pacific island has banned fishing to allow the marine ecosystem to recover

The 10 most common types of plastic choking Europe’s rivers

Climate finance for developing countries reached USD 71 billion in 2017

GSMA Mobile 360 Series – Europe – 14 June 2016

‘Severe’ new US asylum restrictions will put vulnerable families at risk, UN refugee agency says

3 ways blockchain can revolutionize global supply chains

Thursday’s Daily Brief: Ebola in DR Congo, malnutrition in Laos, baby health, support for Sahel force, #ClimateAction

From drone swarms to modified E. Coli: say hello to a new wave of cyberattacks

Venezuela: Competing US, Russia resolutions fail to pass in Security Council

MEPs back update of rail passenger rights across EU

Landmark EU Parliament – ECB agreement on bank supervision

Philanthropy is at a turning point. Here are 6 ways it could go

UN chief pays tribute to the courage of DR Congo citizens, and the sacrifice of blue helmets

China is now heavily endorsing its big investment flow in the Central Eastern European (CEE) countries

General Data Protection Regulation shows results, but work needs to continue

EU Parliament semi worried over democratic deficit

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

GSMA Announces New Keynote Speakers, Event Updates for 2019 “MWC Los Angeles, in Partnership with CTIA”

Unemployment and stagnation can tear Eurozone apart if austere policies persist

Relieving the suffering of dying: Home Palliative Care as a spiritual coping strategy

EU Parliament: The surplus countries must support growth

Eight years after Fukushima, nuclear power is making a comeback

Myanmar military leaders must face genocide charges – UN report

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