November 15, 2012
Another Recession Hits Eurozone
Europe's euro currency bloc says it has fallen into its second recession in three years.
The 17-nation eurozone said Thursday its economy contracted one-tenth of a percent in the July-to-September period, following a drop of two-tenths of one percent in the previous three months. That meets the common definition of a recession - two straight quarters of declining growth.
The eurozone's earlier recession in 2008 and 2009 was triggered largely by the collapse of Lehman Brothers, the now-defunct American investment bank.
The current recession, though, has been centered in Europe itself. It has been marked by the currency bloc's uneven response to its governmental debt crisis over the last three years, record unemployment and bailouts to debt-ridden governments in Greece, Ireland and Portugal.
Germany and France, the eurozone's two biggest economies, advanced slightly in the third quarter, both up two-tenths of one percent. But the economies in Italy, Spain and the Netherlands all contracted.
Debt-ridden eurozone governments have imposed sharp austerity plans to curb their deficits, but the spending cuts have stagnated economic growth. Workers throughout the eurozone's southern tier of countries have taken to the streets in protest of their governments' actions, but European leaders have been resolute in carrying out their plans to control their debt.
Forecasters are predicting that the eurozone economy will advance very slightly next year, barely above stagnation.