No Christmas boost for euro zone in fourth quarter

BRUSSELS Wed Mar 6, 2013 11:33am GMT

People wait at a bus stop in front of an Asian shop after shopping in downtown Malaga, southern Spain May 4, 2012. REUTERS/Jon Nazca

People wait at a bus stop in front of an Asian shop after shopping in downtown Malaga, southern Spain May 4, 2012.

Credit: Reuters/Jon Nazca

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BRUSSELS (Reuters) - Falling investment and consumers' reluctance to spend even at Christmas were behind the euro zone's slide deep into recession in the last three months of 2012, according to a second official estimate on Wednesday.

Economic output from the 17 nations sharing the euro fell 0.6 percent in the fourth quarter of 2012, EU statistics agency Eurostat said, confirming an earlier reading and giving a more detailed breakdown.

"This was the worse quarter in the recessionary cycle," said Mads Koefoed, an economist at Saxobank. "The outcome of the Italian election increases uncertainty, but euro zone growth should come back towards the end of this year," he said.

The data pointed to the vicious circle at the centre of the euro zone's economic malaise. Governments are cutting spending, prompting businesses to freeze investment and lay off staff, in turn leaving households in no state to spend or provide the growth needed to reduce debt.

While backward-looking, the numbers may also influence a monthly meeting of the European Central Bank's Governing Council on Thursday.

The bank is not expected to cut rates this week to below 0.75 percent, but a growing number of economists see a reduction in the cost of borrowing at some point this year, partly because inflation is no longer a threat in the euro zone.

The euro zone's economy is expected to shrink 0.3 percent this year, the European Commission says, and at least for the first and second quarters of 2013, the outlook remains poor.

Complicating matters, business surveys released on Tuesday highlighted the divide between Germany and the rest of the bloc.

The details of the GDP numbers showed Germany was the only major euro zone economy to grow in the fourth quarter, although growth slowed to a crawl, while France, Spain and Italy all contracted.

Overall, government spending made no contribution to gross domestic product in the final quarter of 2012.

A lack of spending by households shaved 0.2 percentage points from the quarterly GDP figure, and business investment also dragged down output by the same margin.

(Reporting by Robin Emmott)

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Comments (3)
2writestoo wrote:
“This was the worse quarter in the recessionary cycle,” said Mads Koefoed, an economist at Saxobank. “The outcome of the Italian election increases uncertainty, but euro zone growth should come back towards the end of this year,” he said. People like Mr Kofoed, Von Rompuy and Barosso have been spouting this clap trap for five years by saying the same in that a recovery was imminent every time they kicked the Euro can toward a cliff after 23 meetings when they applied band aids to Euro zone in an attempt to stop it bleeding from innumerable severed arteries . For goodness sake when are the European electorate going to kick out these gravy train federalists in Strasburg and Brussels. Some have tried this, like for example Greece and Italy only to see unelected puppet premiers being installed by the Franco/ German axis. Thus it is too late for individual nations to escape the web as the fascist have now gained such control that a dictatorship exists where by the European MP’s will do anything to protect their own personalised cash cow regardless of the protestations of the Europeans electorate. That is perhaps with the exception of the Brits who as a nation abhor dictators and fascists and who it increasingly seems , will exit the Euro circus before it sinks in the sea of conflict.

Mar 06, 2013 12:14pm GMT  --  Report as abuse
2writestoo wrote:
“This was the worse quarter in the recessionary cycle,” said Mads Koefoed, an economist at Saxobank. “The outcome of the Italian election increases uncertainty, but euro zone growth should come back towards the end of this year,” he said. People like Mr Kofoed, Von Rompuy and Barosso have been spouting this clap trap for five years by saying the same in that a recovery was imminent every time they kicked the Euro can toward a cliff after 23 meetings when they applied band aids to Euro zone in an attempt to stop it bleeding from innumerable severed arteries . For goodness sake when are the European electorate going to kick out these gravy train federalists in Strasburg and Brussels. Some have tried this, like for example Greece and Italy only to see unelected puppet premiers being installed by the Franco/ German axis. Thus it is too late for individual nations to escape the web as the fascist have now gained such control that a dictatorship exists where by the European MP’s will do anything to protect their own personalised cash cow regardless of the protestations of the Europeans electorate. That is perhaps with the exception of the Brits who as a nation abhor dictators and fascists and who it increasingly seems , will exit the Euro circus before it sinks in the sea of conflict.

Mar 06, 2013 12:14pm GMT  --  Report as abuse
2writestoo wrote:
“This was the worse quarter in the recessionary cycle,” said Mads Koefoed, an economist at Saxobank. “The outcome of the Italian election increases uncertainty, but euro zone growth should come back towards the end of this year,” he said. People like Mr Kofoed, Von Rompuy and Barosso have been spouting this clap trap for five years by saying the same in that a recovery was imminent every time they kicked the Euro can toward a cliff after 23 meetings when they applied band aids to Euro zone in an attempt to stop it bleeding from innumerable severed arteries . For goodness sake when are the European electorate going to kick out these gravy train federalists in Strasburg and Brussels. Some have tried this, like for example Greece and Italy only to see unelected puppet premiers being installed by the Franco/ German axis. Thus it is too late for individual nations to escape the web as the fascist have now gained such control that a dictatorship exists where by the European MP’s will do anything to protect their own personalised cash cow regardless of the protestations of the Europeans electorate. That is perhaps with the exception of the Brits who as a nation abhor dictators and fascists and who it increasingly seems , will exit the Euro circus before it sinks in the sea of conflict.

Mar 06, 2013 12:14pm GMT  --  Report as abuse
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