This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/business/2013/may/16/eurozone-crisis-core-countries-big-chill
The article has changed 2 times. There is an RSS feed of changes available.
Previous version
1
Next version
| Version 0 | Version 1 |
|---|---|
| Climate crisis spreads as big chill strikes eurozone core | Climate crisis spreads as big chill strikes eurozone core |
| (4 months later) | |
| France slid into recession in the first three months of 2013, as the economic malaise that has crippled the crisis-hit peripheral countries of Greece, Portugal and Spain spread to the heart of the eurozone. | France slid into recession in the first three months of 2013, as the economic malaise that has crippled the crisis-hit peripheral countries of Greece, Portugal and Spain spread to the heart of the eurozone. |
| A flurry of official figures released on Wednesday showed that output from the eurozone economy as a whole has now been in decline for six successive quarters. Nine of its 17 member countries are in recession, with the steepest quarterly decline – 1.3% – seen in Cyprus, which received the first tranche of a €10bn (£8.45bn) bailout package earlier this week. | A flurry of official figures released on Wednesday showed that output from the eurozone economy as a whole has now been in decline for six successive quarters. Nine of its 17 member countries are in recession, with the steepest quarterly decline – 1.3% – seen in Cyprus, which received the first tranche of a €10bn (£8.45bn) bailout package earlier this week. |
| The grim data will ramp up the pressure on eurozone politicians to ease the pace of tax rises and spending cuts. But with Angela Merkel facing re-election in September, there is little chance of a radical shift. The German chancellor has so far resisted any easing of austerity measures. | The grim data will ramp up the pressure on eurozone politicians to ease the pace of tax rises and spending cuts. But with Angela Merkel facing re-election in September, there is little chance of a radical shift. The German chancellor has so far resisted any easing of austerity measures. |
| "The best we can hope for in the foreseeable future is a slight slowdown in the pace of austerity, when what we actually need is a grand reversal of strategy," said Sony Kapoor, director of think-tank Re-Define. Germany managed to avoid a recession, but scraped growth of just 0.1%. Simon Derrick, chief currency strategist at BNY Mellon, said, "it's easy to get caught up in the drama of the individual crises in the eurozone, but behind it all it's important not to forget that it does very real damage to economic performance. What you're seeing now is exactly that." | "The best we can hope for in the foreseeable future is a slight slowdown in the pace of austerity, when what we actually need is a grand reversal of strategy," said Sony Kapoor, director of think-tank Re-Define. Germany managed to avoid a recession, but scraped growth of just 0.1%. Simon Derrick, chief currency strategist at BNY Mellon, said, "it's easy to get caught up in the drama of the individual crises in the eurozone, but behind it all it's important not to forget that it does very real damage to economic performance. What you're seeing now is exactly that." |
| France double dip | France double dip |
| Almost exactly a year after François Hollande's inauguration as president, it emerged on Wednesday that France has slipped back into recession and economists said there would be more bad news to come for the Hollande government. "The economy will remain under pressure in the coming quarters from rising unemployment, tight credit and higher taxation," said Petr Zemcik, director of economic research at Moody's Analytics. | Almost exactly a year after François Hollande's inauguration as president, it emerged on Wednesday that France has slipped back into recession and economists said there would be more bad news to come for the Hollande government. "The economy will remain under pressure in the coming quarters from rising unemployment, tight credit and higher taxation," said Petr Zemcik, director of economic research at Moody's Analytics. |
| Finance minister Pierre Moscovici was forced to deny that his forecast of a sickly 0.1% economic growth for 2013 as a whole was too optimistic, after Wednesday's data showed a 0.2% decline in GDP in the first quarter. "I'm sticking to the figures," he said. | Finance minister Pierre Moscovici was forced to deny that his forecast of a sickly 0.1% economic growth for 2013 as a whole was too optimistic, after Wednesday's data showed a 0.2% decline in GDP in the first quarter. "I'm sticking to the figures," he said. |
| Germany scraping growth | Germany scraping growth |
| Although Europe's largest economy avoided recession, scraping growth of 0.1% in the first quarter, it was a weaker-than-expected reading and underlined the fact that the downturn in the eurozone is affecting its traditionally powerful core countries as well as the crisis-hit periphery . | Although Europe's largest economy avoided recession, scraping growth of 0.1% in the first quarter, it was a weaker-than-expected reading and underlined the fact that the downturn in the eurozone is affecting its traditionally powerful core countries as well as the crisis-hit periphery . |
| Guy Foster, head of portfolio strategy at investment manager Brewin Dolphin, said the strength of the euro against the yen in recent months, as the Bank of Japan implements a massive quantitative easing programme, has not helped the export-dependent German economy. | Guy Foster, head of portfolio strategy at investment manager Brewin Dolphin, said the strength of the euro against the yen in recent months, as the Bank of Japan implements a massive quantitative easing programme, has not helped the export-dependent German economy. |
| "Germany is suffering a perfect storm. Weaker growth in China weighs on demand, while the depreciation of the yen is making supply more competitive." | "Germany is suffering a perfect storm. Weaker growth in China weighs on demand, while the depreciation of the yen is making supply more competitive." |
| Neville Hill, economist at Credit Suisse, said, "German GDP only rose by 0.1% quarter on quarter in Q1 after a material 0.7%q/q fall in the fourth quarter last year. Averaging out the two quarters, this is a poor performance for a competitive economy that is not facing any fiscal headwinds and suggests that weakness has spread to all European countries" | Neville Hill, economist at Credit Suisse, said, "German GDP only rose by 0.1% quarter on quarter in Q1 after a material 0.7%q/q fall in the fourth quarter last year. Averaging out the two quarters, this is a poor performance for a competitive economy that is not facing any fiscal headwinds and suggests that weakness has spread to all European countries" |
| Spain down 0.5% | Spain down 0.5% |
| Wednesday's figures confirmed there has been no let-up for the Spanish economy, which continues to suffer the after-effects of a catastrophic property bust, and the resulting financial crisis, which prompted Madrid to ask its eurozone partners for a bailout of its banks. | Wednesday's figures confirmed there has been no let-up for the Spanish economy, which continues to suffer the after-effects of a catastrophic property bust, and the resulting financial crisis, which prompted Madrid to ask its eurozone partners for a bailout of its banks. |
| The Spanish economy contracted by 0.5% in the first quarter of this year, and is now a full 2% smaller than 12 months ago. | The Spanish economy contracted by 0.5% in the first quarter of this year, and is now a full 2% smaller than 12 months ago. |
| Italy down 0.5% | Italy down 0.5% |
| Prime minister Enrico Letta recently warned that his country was "dying from fiscal consolidation", and Wednesday's figures suggested the economy remains in intensive care. | Prime minister Enrico Letta recently warned that his country was "dying from fiscal consolidation", and Wednesday's figures suggested the economy remains in intensive care. |
| GDP declined by another 0.5% in the first quarter of 2013, according yesterday's figures, slipping to a level 2.3% lower than a year earlier. | GDP declined by another 0.5% in the first quarter of 2013, according yesterday's figures, slipping to a level 2.3% lower than a year earlier. |
| Voters in Italy's recent general election appeared to reject the harsh austerity measures imposed by the technocratic government of Mario Monti, and Letta has emerged as the leader of a cross-party anti-austerity coalition. | Voters in Italy's recent general election appeared to reject the harsh austerity measures imposed by the technocratic government of Mario Monti, and Letta has emerged as the leader of a cross-party anti-austerity coalition. |
| Greece five-year recession | Greece five-year recession |
| Financial turmoil in Greece may have faded from the headlines in recent months as Cyprus became the latest eurozone member to receive a bailout; but according to figures released in Athens , the economy is still contracting at an annual rate of 5.3% (no quarterly figures comparable with other countries' have yet been published). | Financial turmoil in Greece may have faded from the headlines in recent months as Cyprus became the latest eurozone member to receive a bailout; but according to figures released in Athens , the economy is still contracting at an annual rate of 5.3% (no quarterly figures comparable with other countries' have yet been published). |
| That's marginally slower than the 5.7% pace of decline in the final quarter of 2012, but suggests the economy remains deep in the doldrums, more than five years after it first slipped into recession. | That's marginally slower than the 5.7% pace of decline in the final quarter of 2012, but suggests the economy remains deep in the doldrums, more than five years after it first slipped into recession. |
| Netherlands €46bn spending cuts | Netherlands €46bn spending cuts |
| The Netherlands is another core eurozone economy feeling the chill winds of the crisis. The latest figures show that it has been contracting for three successive quarters, as the government of Mark Rutte battles to implement a €46bn (£38bn) package of public spending cuts, and households struggle to cope with the impact of a property bust. Dutch GDP declined by 0.1% in the first quarter of 2013.Portugal: | The Netherlands is another core eurozone economy feeling the chill winds of the crisis. The latest figures show that it has been contracting for three successive quarters, as the government of Mark Rutte battles to implement a €46bn (£38bn) package of public spending cuts, and households struggle to cope with the impact of a property bust. Dutch GDP declined by 0.1% in the first quarter of 2013.Portugal: |
| Like Greece, bailed-out Portugal remains deep in the red, though the pace of contraction did ease in the first quarter of 2013, with GDP declining by 0.3%, down from 1.8% in the final three months of 2012. However, with the Portuguese economy almost 4% smaller than a year ago, there is still little sign of a light at the end of the tunnel. | Like Greece, bailed-out Portugal remains deep in the red, though the pace of contraction did ease in the first quarter of 2013, with GDP declining by 0.3%, down from 1.8% in the final three months of 2012. However, with the Portuguese economy almost 4% smaller than a year ago, there is still little sign of a light at the end of the tunnel. |
| Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |
Previous version
1
Next version