News / Europe

European Economy Shrinks

Traders at their desks in front of the DAX board at the Frankfurt stock exchange, August 14, 2012. Traders at their desks in front of the DAX board at the Frankfurt stock exchange, August 14, 2012.
x
Traders at their desks in front of the DAX board at the Frankfurt stock exchange, August 14, 2012.
Traders at their desks in front of the DAX board at the Frankfurt stock exchange, August 14, 2012.
TEXT SIZE - +
Lisa Bryant
PARIS— Europe's two biggest economies have managed to dodge recession, but newly published statistics offer grim news for the region as a whole.  

New figures released by Eurostat statistical agency show the economies of both the eurozone and the 27-member European Union shrank by 0.2 percent in the second quarter of the year.

What is a Recession?

  • The economy has "negative growth," meaning it shrinks for 2 consecutive quarters (3 month periods)
  • Some economists say a recession becomes a depression if the economy shrinks by 10% or more
  • A shrinking economy can raise unemployment rates, depress stock and housing markets
The only glimmer of good news came from Germany and France. Growth for Europe's largest economy, Germany, was a modest 0.3 percent. And the second largest economy France managed to escape widespread expectations of recession by registering zero growth for a third consecutive quarter. Recession is defined as two successive quarters of negative growth.

Speaking on French radio, Economy and Finance Minister Pierre Moscovici offered a modestly upbeat reaction to the findings.

Moscovici said there were a few encouraging signs, including a small pickup in investment. But he said the fact that France's economy was faring slightly better than those of Italy and Spain was not good enough. Both economies contracted in the second quarters.

Analysts point to plenty of worrying indicators. French household consumption shrank in the second quarter and unemployment is just below 10 percent.

Economist Nicolas Bouzou, director of the Asteres group, told RTL radio that means the Socialist government in France faces daunting challenges as it tries to both encourage growth and employment and cut the deficit.

Experts are watching France carefully, fearing it may be the next country hit by the eurozone crisis. Some worry the fall may bring more bad news for the 17-nation currency area.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comment Sorting
Comments
     
by: Fritz from: Germany
August 16, 2012 3:25 PM
European Economy Shrinks... too many Muslimes... time to send them back to their Islamic countries...


by: Godwin from: Nigeria
August 15, 2012 2:48 PM
Righteousness exalts a nation; sin is a reproach to a people that forget their God. In those days Europe was concerned with teaching people that God exists. Today Europe needs re-evangelizing. Like the chosen people, the descendants of Abraham by Isaac they have forgotten where they started. The saying goes that if you forget where you're coming from, you as well forget where you're going to. That's exactly what's happening in Europe, USA and Canada today. And when that becomes the case, their state cannot but become worse until they trace their steps back and return to their Creator. Because children are now reared like zoo animals without human inclined orientation, they grow wild. No wonder shooting has become a daily occurrence out there. A scientist once said a life without an assumption of God is purposeless. The purposelessness in Europe and elsewhere is leading to fruitless endeavors because, "if the Lord does not guard the city, in vane does the watchman waste his sleep; unless the Lord builds the house, in vane does the workman waste his effort." Ps 127:1. The ungodly nations that seem to prosper is the captivity and exile of those who lose sight of their God. It is the mystery of God. It is the same God who does it. But the prosperity with which God's people are blessed usually far surpasses the riches of the ungodly when the prodigal sons return from the Far Country. Let him who has ears hear.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid