Euro-Area Economy Contracts Showing Recession Cracks

The map of Europe is featured on the face of a one Euro coin seen in this photo illustration taken in ParisOn Thursday stock futures moved lower following news released by Euro-stat,  the EU’s statistics office, which reveals that the economy in the euro-area deepened more than economists had estimated, marking the worst quarterly performance since 2009 during the heights of the global recession.

The economies of Germany, France and Italy all contracted more than estimated in the fourth quarter. Germany’s economy contracted -0.6 percent while French GDP fell -0.3 percent and Italy’s GDP lowered -0.9 percent.

As a whole, the euro-area economy contracted -0.9 percent in the fourth quarter from a year earlier.

In 2012, it contracted -0.5 percent. The decline was steeper than the -0.4 percent estimated decline, revealing the steepest decline since 2009 when the global economy was clearly in recession mode.

The economy in the euro-area has contracted for three consecutive quarters, pinned back by high unemployment across several member countries in the euro area where austerity has gained traction along with a strong euro currency and a global economy that is not quite strong enough to lift the euro-area out of recession.

Last week European Central Bank President Mario Draghi held interest rates steady at the historically low level of .075 and announced during a ECB meeting that the economy across the euro-area remains fragile but a gradual recovery is expected to occur in 2013.

 

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