How’s that austerity thing working out for you (again)?

There is simply no denying anymore that Europe is entering the second dip of a double dip recession as a result of it’s austerian policies.

Euro Zone Economy Shrinks for a Second Quarter

By JACK EWING, The New York Times

Published: November 15, 2012

Gross domestic product in the euro zone fell 0.1 percent in the three months through September compared with the previous quarter, according to Eurostat, the European Union statistics agency. The downturn was slightly less severe than in the second quarter, when growth contracted 0.2 percent. But it was the fourth quarter in a row of zero growth or worse.

Perhaps more worrisome, the data showed that Spain, Portugal and several other countries remain far from the kind of recovery that would bring increased tax receipts and help them overcome their debt problems. European leaders, who have benefited from a tenuous calm on financial markets in recent months, are likely to face additional pressure to ease the government austerity programs that have undercut growth in Southern Europe.

A recession is often defined as two quarters in a row of falling output, though many economists say it is important to take other data into account. But with unemployment in the euro area at 11.6 percent and nearly 26 million people out of work, few would dispute that the region is in a deep downturn.

“Leading indicators suggest that the euro zone recession will broaden and deepen in the current fourth quarter,” said Martin van Vliet, an economist at ING Bank.

(I)n Western Europe the economic decline spread to Austria and the Netherlands, which had been growing in previous quarters. The Austrian economy contracted 0.1 percent, while the previously healthy Dutch economy plunged 1.1 percent, catching economists off guard.

One reason for the decline was that Dutch consumers cut back purchases of cars, illustrating how the crisis in the European auto industry is having a broader effect. Slower export growth and a decline in construction also had an effect, according to Statistics Netherlands, the official data provider.

Euro Area Slips Into Recession Second Time in Four Years

By Marcus Bensasson, Bloomberg News

November 15, 2012

Europe’s economic malaise is deepening as governments across the region impose budget cuts to narrow their fiscal deficits. Spain and Cyprus this year joined the list of countries seeking external aid, following Greece, Portugal and Ireland. Unions across the region have held protests against austerity measures.

“Overall I think it’s remarkable that we haven’t seen so far in the last year a stronger decrease in economic activity considering the strength of the euro-zone debt crisis,” said Alexander Krueger, chief economist at Bankhaus Lampe in Dusseldorf. “Stopping the downward trend is the story for the first half of next year.”

Euro-area industrial production dropped 2.5 percent in September from the previous month, the most in more than three years, led by double-digit declines in Portugal and Ireland. German investor confidence unexpectedly declined in November, the ZEW Center for European Economic Research in Mannheim said on Nov. 13.

Siemens AG, the biggest engineering company in Europe, on Nov. 8 unveiled a 6 billion-euro savings plan to restore profitability, acknowledging it was slow to react to shrinking demand. Commerzbank AG, which is forgoing its dividend, on Nov. 8 reported profit that missed analysts’ expectations on losses from non-core assets and a decline in consumer banking earnings.

How about England and our Neo-Liberal friend David Cameron?

UK risks triple-dip recession, Mervyn King warns

Josephine Moulds, The Guardian

Wednesday 14 November 2012 08.46 EST

The UK economy risks suffering from a triple-dip recession amid a period of persistently low growth that will last until the next election, the governor of the Bank of England has warned.

Sir Mervyn King cut Britain’s growth forecast to 1% next year and warned that output was more likely than not to remain below pre-crisis levels over the next three years. “There seems a greater risk that the UK economy may be in a period of persistent low growth,” he said on Wednesday.

The UK economy emerged from a double-dip recession in the third quarter of this year, when the economy grew by 1%, but King warned that this was driven by one-off factors. “Continuing the recent zig-zag pattern, output growth is likely to fall back sharply in the fourth quarter as the boost from the Olympics in the summer is reversed – indeed output may shrink a little this quarter,” he said. If that period of contraction continues into 2013, the UK could drop into a triple-dip recession.

How are people reacting?  As you would expect there are massive protests all across Europe.

Europe unites in austerity protests against cuts and job losses

Tom Kington in Rome, Helena Smith in Athens, Kim Willsher in Paris and Martin Roberts in Madrid, The Guardian

Wednesday 14 November 2012 14.30 EST

Hundreds of thousands of Europeans mounted one of the biggest coordinated anti-austerity protests across the continent on Wednesday, marching against German-orchestrated cuts as the eurozone is poised to move back into recession.

Millions took part in Europe-wide strikes, and in city after city along the continent’s debt-encrusted Mediterranean rim, thousands marched and scores were arrested after clashes with police.

There were banners declaring “Austerity kills,” Occupy masks, flares, improvised loudspeakers and cancelled flights. But there was also a violent, even desperate edge to the demonstrations, particularly in Madrid and several Italian cities. In the Spanish capital, police fired rubber bullets to subdue the crowd; in Pisa, protesters occupied the Leaning Tower, and in Sicily cars were burned.

“There is a social emergency in the south,” said Bernadette S├ęgol, the secretary general of the European Trade Union Confederation. “All recognise that the policies carried out now are unfair and not working.”

Workers Across Europe Synchronize Protests

By RAPHAEL MINDER, The New York Times

Published: November 14, 2012

The breadth of the demonstrations, which affected scores of cities, reflected widespread unhappiness with high unemployment, slowing growth and worsening economic prospects in Europe, and the resistance that European governments confront as they push plans for more belt tightening. Occasional clashes with the police were reported in some cities.

Among those striking on Wednesday were railroad workers in Belgium; airline workers, autoworkers and teachers in Spain; civil servants in Italy; and transit workers in Portugal. Union leaders called the coordinated actions historic.

Government officials generally played down the disruptions caused by the actions and said their countries had no alternative but to cut spending and reduce their deficits. The Spanish economy minister, Luis de Guindos, said his government “is convinced that the path we have taken is the only possible way out.”

The tumbrils are closer than you think.

1 comment

  1. ek hornbeck

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