Eurozone debt woes push Europe nearer to recession
Source: Agencies |
August 15, 2012, Wednesday
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Print Edition
Print Edition
EUROPE is edging closer to recession, hit by the crippling debt woes of the 17-country euro bloc, official figures showed yesterday.
Eurostat, the European Union's statistics agency, revealed that the economies of both the eurozone and the wider 27-country EU shrank by a quarterly rate of 0.2 percent in the second quarter of this year. In the first quarter, output for both regions was flat. A recession is officially defined as two straight quarters of falling output.
Europe's stumbling economy is making it harder for other economies around the world to recover, and policymakers from all round the world are urging more decisive action, particularly from the European Central Bank, to deal with the crippling debt crisis to restore confidence to the global economy.
"The ECB's recent announcement that it will do 'whatever it takes' to save the euro is welcome, but clarity over what will be done is crucial," said Tom Rogers, a senior economic adviser for accounting firm Ernst & Young.
The region is the US's largest export customer and any fall-off in demand will hit order books? as well as US President Barack Obama's election prospects.
The eurozone is grappling with sky-high debt levels and record unemployment of 11.2 percent. Compared with the year before, the eurozone's economy is 0.4 percent smaller.
Without Germany continuing to post solid levels of growth, the eurozone would officially be in recession.
Europe's largest economy grew by a quarterly rate of 0.3 percent in the second quarter. Though down on the 0.5 percent in the first quarter, the gain was unexpected - most economists thought Germany would only grow by 0.2 percent.
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