The ongoing debt crisis in the eurozone dragged the bloc into what is being touted as the second eurozone recession since the year 2009 during the third quarter in spite of moderate growth in European nations France and Germany.
Eurozone recession data indicates that both the economies of European nations France and Germany saw an increase of approximately 0.2 percent in the July-September quarter but their resilience was not able to save the union from contraction as various countries like Austria, Italy, Netherlands and Spain faced shrinkage.
The debt crisis in the eurozone caused the economic output to decline by roughly 0.1 percent in the third quarter after a 0.2 percent decrease in the previous one. Together, these two periods of shrinkage pushed the eurozone into the grips of economic downturn, even though both Spain and Italy have been shrinking for the duration of approximately one year, not to mention the fact that Greece tries to deal with total depression.
Signs of Hope
A rebound seems to be far off still in the Old Continent. The debt crisis in the eurozone began in Greece almots three year ago. The effects of the crisis are still echoing all over the world and thwarting what could have been a lasting recovery.
As it was underlined by experts, even the top two economies in the eurozone were expected to give in to the effects of recession in the last three months of 2012. Economists believe that it was the final good number for European nations France and Germany in this span of time. The economy in European nations France and Germany is not expected to go back to respectable rates of growth until the middle of 2013. Germany is said to shrink during the last quarter of 2012. The economy in France is to be affected by debt crisis in the eurozone as well.
For the entire period of 2012, the European Commission views the contraction of the eurozone by approximately 0.4 percent while increasing only about 0.1 percent in the year 2013. Surveys in the business sector indicate troubled times ahead and the backlash of the public to police is increasing.
Most economists forecast that the new eurozone recession is going to extend till the end of the year and the following year, underlying at the same time that it is to remain just above the point of stagnation which verifies what the Commission has predicted. A growth of just 0.1 percent is expected to offset a contraction around 0.5 percent.
Thousands of employees protested all over Europe on the 14th of November in order to show their objection to the cuts in spending of the government. They claim that this is driving the area into a deeper state of financial ruin but Germany and the Commission are convinced that this is necessary to cure the wounds brought on by a decade-long, boom fuelled by credit.
This double-dip eurozone recession seems to be completely self-made, is what is claimed by some analysts. It happens to be the outcome of increased austerity in the southern countries together with unwillingness in the northern countries to carry out anything else.