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Europe Falls Into Recession (Was There Before)

From Reuters:

Euro zone falls into second recession since 2009

By Robin Emmott and Michelle Martin | November 15, 2012

BRUSSELS/BERLIN (Reuters) – The debt crisis dragged the euro zone into its second recession since 2009 in the third quarter despite modest growth in Germany and France, data showed on Thursday.

The two leading economies both managed 0.2 percent growth in the July-to-September period.

And never mind that inflation in Europe must be more than 2%.

But the resilience could not save the austerity-hit 17-nation bloc from overall contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.

Economic output in the euro zone fell 0.1 percent in the quarter, following a 0.2-percent drop in the second quarter.

Those two quarters of contraction put the euro zone’s 9.4 trillion euro ($12 trillion) economy in recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression…

Funny how Reuters uses the ‘old standard’ for defining a recession (two consecutive quarters of negative growth) for Europe. Meanwhile, Reuters and everyone else insists on claiming that the ‘Bush recession’ started back in December 2007, after just one quarter of negative growth. (See chart below.)

So by their own standard, the Euro-Zone has been in a recession for three months. So why wasn’t it reported that way? To help Obama?

Most economists expect Germany to contract in the fourth quarter for the first time since the end of 2011. Where Germany goes, France is likely to follow and economists expect its economy to shrink in the October-to-December period.

For all of 2012, the European Commission sees the euro zone contracting 0.4 percent..

So things are only going to get worse.

Millions of workers went on strike across Europe on Wednesday to protest the government spending cuts they say are driving the region into a deeper malaise but which Germany and the Commission say are crucial to healing the wounds of a decade-long, credit-fuelled boom.

"We are now getting into a double dip recession which is entirely self-made," said Paul De Grauwe, an economist with the London School of Economics. "It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else," he said…

Notice that Reuters is blaming this recession on austerity measures. Which have been few and far between. But Reuters wants to make sure that nobody tries to get Obama to cut government spending.

Again, as we mentioned above:

http://newsimg.bbc.co.uk/media/images/46632000/gif/_46632314_us_rec_oct09_466.gif

Either the US did not go into a recession in the last quarter of 2007, or Europe has been in a recession for one quarter already.

They can’t have it both ways.

This article was posted by Steve Gilbert on Thursday, November 15th, 2012. Comments are currently closed.

4 Responses to “Europe Falls Into Recession (Was There Before)”

  1. Rusty Shackleford

    And the ultimate truth of socialism once again lands on the shoulders of its shocked architects.

    It was a lengthy courtship because the US was supplying their defense needs. Money they didn’t have to spend on guns so they spent it on butter. Problem is, their gross national products continued to dwindle. Ask me how much it hurt France when Peugeot stopped exporting cars to the US. But then, their socialists in the workplace had been turning out a very inferior product for years and their market share reflected that. Americans like cars that last. Peugeots didn’t. Cranky, finnicky, temperamental cars…like the people who built them.

    The Dassault factory, which builds the lovely Falcon business jets experienced dwindling sales over the years due mainly to employee costs and inability to meet demand to produce new jets. Their waiting list is long so customers would opt out and buy a Gulfstream instead or a Hawker or similar.

    Airbus is one of the only things keeping Europe afloat.

    But I digress.

    They ran out of other people’s money. And this time, it’s going to be a much bigger heave in the vomiting because of the virus known as socialism.

    • Rusty Shackleford

      Meant to add that it’s not just French products. Other European products used to be sold in the US but often were outsold by Japanese products. Note the difference in the two. Japanese products with emphasis on reliability and cost. European products with emphasis on exclusivity and uniqueness. Jaguar, Peugeot, Rover, even Fiat (and they’re marketing the new Fiat 500 the same, exact way…’be unique”, “be different“). While their factory workers show up at 9AM, have a two-hour lunch, leave at three or four in the afternoon and have free healthcare, housing cost help, other subsidies that eat away the bottom line of producing a product.

      And so it goes.

  2. dasher

    Great post Rusty. I think too, that there was a storm of one sort or another that hit the French wine/champagne crops this year…wasn’t there?

    Me and the missus visited europe about 3x in the past 6 years, I’m darn glad we went when we did, I have no desire to go there now, imagine all the problems with the striking!

    D.

  3. Right of the People

    Don’t forget that most of the countries in the EU are being overrun by jihadis and their herds of offspring since they reproduce like rabbits.




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