No way out for Eurozone’s stagnating economy

Meeting in the Champs Elysees Presidential Pallas between François Hollande, President of the French Republic, and José Manuel Barroso, President of the European Commission. (EC Audiovisual Services, 07/01/2014).

Meeting in the Champs Elysees Presidential Pallas between François Hollande, President of the French Republic, and José Manuel Barroso, President of the European Commission. (EC Audiovisual Services, 07/01/2014).

This morning the German Federal Statistical Office issued a Press release revealing that the country grew by a mere 0.4% last year. This is almost half than the 0.7% GDP increase that Germany recorded in 2012. Along the same line of developments, Eurostat, the EU statistical office, published a Press release estimating that the Eurozone economy grew by a barely positive 0.1% during the third quarter of 2013 compared to the previous quarter. During the second quarter of last year euro area GDP grew by 0.3% on a q/q basis.

On a yearly basis, GDP fell by 0.3% in the euro area and grew by 0.2 % in the EU-28 in the third quarter of 2013, after -0.6% and -0.1% respectively in the previous quarter. Obviously, the weak growth tendency observed half-way last year is losing its feeble momentum. The President of the European Central Bank Mario Draghi has repeatedly noted that.

Hollande disappointed Europe

The problem is that France, the second largest Eurozone economy, didn’t manage to grow at all during the third quarter of 2013 and actually recorded a loss of 0.1% of GDP. Unfortunately, President Francois Hollande, didn’t manage to convince Europe and the world that his initiative to ‘relaunch the French economy’ will change the negative business climate prevailing in his country.

In a Press conference staged yesterday in the Champs Elysees Presidential Pallas, Hollande ignored questions about his alleged affair with a French actress and focused on what he called the ‘relaunch’ of the economy. He initially announced reductions in government budget deficits of the order of €50 billion during the next two years, but he failed to identify how this target will be realised. He vaguely spoke of reshuffles of government spending and revenues accounts.

Stagnation to continue

This was a real disappointment for the crisis stricken countries of Eurozone. Euro area member states in the South were expecting from Paris a concrete alternative policy line, to counter the austere Teutonic proposal. What Hollande had to offer instead was a German inspired policy target of spending cuts, which was voided though some minutes later in a French surrealistic way. The unspoken aim to also relaunch his Presidency remained in the sphere of intentions.

In any case, Eurozone economy seems caught in stagnation trap, without a visible way out. Coming back to Eurostat’s announcements it found that, “During the third quarter of 2013, household final consumption expenditure rose by 0.1 % in the euro area (after 0.1% in the previous quarter). Gross fixed capital formation increased by 0.5% (after 0.3% )”. At the same time, exports rose by 0.3% and imports increased by 1.2%.

  Eurostat table. Growth rates for third quarter 2013, in % q/q


There is no doubt that Eurozone is always plagued by the recession in most of its member states. The same is true for Germany. Exports cannot make it up for the quite weak internal demand for consumption. Without a major change in the main policy lines which impose severe austerity, the current conjuncture will continue to prevail. France proves incapable of changing the political and economic climate in Europe. The participation of the German socialists in the new grand coalition federal government in Berlin is not going to change the basics of this recipe.


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

5 things you may not know about Dubai

We are ‘burning up our future’, UN’s Bachelet tells Human Rights Council

4 innovation hotspots in the Arab world

We need to deep clean the oceans. Here’s how to pay for it

After Brexit and Grexit, Brussels to deal with Poloust

With 10 million Yemenis ‘one step away from famine’, donors pledge $2.6 billion

This afternoon Britain will be once more isolated from mainland Europe

This entrepreneur built an island resort out of plastic waste

EU Parliament semi worried over democratic deficit

In South Sudan, mothers teaching daughters ‘safer’ ways to survive rape

New York City has a plan to fight fast fashion waste. Here’s how it works

Why banks escape from competition rules but not pharmaceutical firms

We had the hottest June ever this year – this is what happened around the world

Countering illegal hate speech online – EU Code of Conduct ensures swift response

Meet the robot fighting back against coral reef destruction

FROM THE FIELD: Faces and Voices of Conflict

European Junior Enterprises to address the significant skills mismatch in the EU between school and employment

The use of technology in medicine: How to not deconstruct our ethics

Empty stadiums and online streaming: how coronavirus is affecting the media industry

3 things the G20 can do to save the World Trade Organization

UN global education envoy urges new funding for ‘lost generation’ of children forced out of classrooms by conflict

5G will drive Industry 4.0 in the Middle East and Africa

FROM THE FIELD: A UN peacekeepers-eye view of DR Congo

Europe can be at the heart of tech with purpose

As monsoon rains pound Rohingya refugee camps, UN food relief agency steps up aid

Parliament compromises on Banking Union but sends market abusers to jail

EU paves the way for a stronger, more ambitious partnership with Africa

These are the world’s most future-proof cities

MWC 2016 LIVE: Mobile has power to tame transaction fees – PayPal CEO

Human health – litmus paper for the climate change?

Greece leaves EU aid program, gets last 15 billion euro

The G7 should take the lead on ocean targets for 2020

Vaccine hesitancy: a pregnancy related issue?

What happens when you toss your water bottle in the trash?

These are the next big products in consumer technology

Latin America is a mass-transit powerhouse. But it needs fine-tuning

UN chief hopeful for Libya, after Quartet meeting in Tunis

Five ways individuals can help save the oceans

Let your fingers do the walking

ITU Telecom World Awards launches 2018 edition

3 things to know about India’s space programme

Where America’s refugees came from in 2018

ECB: Euro area should smooth out the consumption and income shocks of its members

Trump fines China with $50 billion a year plus some more…

World food security increasingly at risk due to ‘unprecedented’ climate change impact, new UN report warns

WHO launches COVID-19 health alert service with Facebook and WhatsApp – Updates from Friday’s WHO briefing

Mozambique pledging conference hopes to soften devastating blow of back-to-back cyclones

These are the cities where people work the longest hours

Women and girls in science – from aspiration to reality

Mainland Europe adopts Germanic cartel business patterns

Germany openly seeks more advantages for its banks

Bigotry makes politicians ‘complicit in the violence that follows’ : UN independent experts

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

SDG progress ‘in danger’ of going backwards without change in direction, new UN report reveals

Immigrant integration policies have improved but challenges remain

What Merkel and Macron are to tell Trump in Davos?

From Hangzhou to Rwanda: how Jack Ma brought Chinese e-commerce to Africa

A Sting Exclusive: “Europe must be more ambitious in COP21 and lead on climate finance and sustainable development”, Green UK MEP Jean Lambert points out from Brussels

Here’s what you need to know about the UK’s booming second-hand economy

The European Brain Drain: a truth or a myth?

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your 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