The euro-zone economy: Recession, cont’d

Posted: May 16, 2013 in economy
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The euro-zone economy


Shrinking output may prompt the European Central Bank to ease further

ONE euro crisis may be over, but another has begun. The single currency is no longer under siege in financial markets, but it will not prove politically viable unless growth returns. Any residual hopes of an early recovery were dashed by GDP figures published on May 15th. These showed the euro zone still mired in recession.

Euro-area output shrank in the first three months of this year by 0.2% compared with its level in the final quarter of 2012 (see chart). That decline, which was a bit worse than expected, left GDP 1% lower than a year ago. Output has now contracted for six consecutive quarters in a recession stretching back to late 2011.

The downturn is still steepest in southern Europe. Output fell by 0.5% in both Italy and Spain, the third- and fourth-biggest economies in the euro zone. But GDP is now declining in most euro-zone countries, including France, the area’s second-largest …

via Economic Crisis


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