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Saturday, May 16, 2009

European economy plummets

When I was young and even dared to study economics, I was taught that a growth of less than 2% was considered a recession. Negative growth, real shrinking of the economy was unconceivable, at least for yearly terms.

Today we have already become almost accustomed to such figures but the fall of the German economy by 6.9% in the last 12 months really breaks all records, at least in the industrialized world.

Germany, like so many other countries in the Reaganomics Empire, had a structure based on exports, not domestic markets, and that worked fine for a while. But now the global markets have collapsed and the dependence on foreign buyers has caused such a brutal contraction.

Overall, EU economy fell 2.5% only in this last trimester. Similar figures to those of Germany happened in Italy (-5.9% in last year), where the exports sector is also dominant. Even France, that had managed to ride the storm somewhat better has lost 3.2% of its activity in the last 12 months, 1.2% in the last three alone. Spain lost 2.9% in the last year.

The situation is particularly bad in the countries of Eastern Europe, like Latvia and Lithuania, where the contraction has been of a brutal 10% along the year. Only Slovakia shows still some minimal growth among all EU states were recent data is available.

Source: Gara.

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