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.
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

UN Ambassador Power Highlights Plight of Women Prisoners

She launches the 'Free the 20' campaign, aimed at profiling women being deprived of their freedom around the world More

Satellite Launch Sparks Spectacular Light Show

A slight delay in a satellite launch lit up the Florida sky early this morning More

Fleeing IS Killings in Syria, Family Reaches Bavaria

Exhausted, scared and under-nourished, Khalil and Maha's tale mirrors those of thousands of refugees from war-torn countries who have left their homes in the hopes of finding a better life 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.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs