Main focus of Friday, August 15, 2008

Is Europe facing recession?

The economy of the Eurozone is shrinking: according to the Statistical Office of the European Communities (Eurostat), for the first time since the introduction of the euro the gross domestic product (GDP) of the 15 member countries sunk by 0.2 percent in the second quarter of 2008. Is Europe facing a recession?

El País - Spain

The daily El País calls for concerted action from Europe to face the challenge of the economic crisis: "One year after the onset of the first symptoms of a financial crisis, all indicators confirm that the fever has ... spread to all the national economies. Europe's [national economies] have slowed down dramatically, above all key economies like Germany, France, Italy and of course Spain, which have all registered zero or slightly above zero growth in comparison to previous growth figures. ... Europe must adopt a coordinated strategy to tackle common problems such as financial instability. The European Central Bank has an important role to play here. So far it has been preoccupied with fighting inflation rather than boosting the economy and its capacity to create jobs." (15/08/2008)

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More from the press review on the subject » Fiscal Policy, » Economic Policy, » Financial Markets, » Europe

De Volkskrant - Netherlands

The national newspaper De Volkskrant does not see the poor economic data as an indication of an impending recession in the Eurozone. "Worn out by the constant flow of bad economic news over the past year, consumers are obviously pessimistic. But there is no cause for panic because there are arguments to support a more positive perspective. ... Within four weeks the oil price has gone down by almost 25 percent, and many other raw materials are considerably cheaper than they were. The threat of further inflation is therefore receding. And the euro has also sunk below the 1.50 dollar mark, which will have a positive impact on exports. And even the 0.5 percent decrease in Germany's economy ... was considerably less than expected. In short, it does not look like we are facing a recession, which is generally announced when growth decelerates in two consecutive quarters. Therefore we would be well advised not to talk of a recession for the time being." (15/08/2008)

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More from the press review on the subject » Trade, » Economic Policy, » Financial Markets, » Europe

La Repubblica - Italy

La Repubblica newspaper stresses the role of consumers in the European economic crisis. "Technically we are not yet there, but psychologically Europe has already entered a recession. Eurostat signals a GDP drop of 0.2 percent in the Eurozone, the worst result since the introduction of the single currency. ... The European Commission ... is attempting to dampen the alarm signals and span safety nets. ... But what really troubles Brussels is the confidence of businesses and consumers, which has sunk to an all-time low and dispels all hope of a reverse trend. Paradoxically, the proof comes from a positive index. Despite the rise in raw material prices, inflation has remained constant at four percent. That means citizens have responded to the price rises by curtailing consumption, and in so doing brought about the negative trend." (15/08/2008)

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More from the press review on the subject » Fiscal Policy, » Corporations, » Consumers, » Economic Policy, » Europe
All available articles from » Andrea Bonanni

Süddeutsche Zeitung - Germany

For the German daily Süddeutsche Zeitung the quarterly statistics for gross domestic product (GDP) are not a reliable basis for effective economic policy: "Whether GDP goes up or down by one percent is completely irrelevant for office workers. ... If the figure is high, the companies did well. But for the average citizen what counts is how much goes into their pockets. ... Moreover, it is long-term development that matters. ... Instead of debating schemes to give the economy a quick boost [politicians] should be concentrating their energy on how the state can create good conditions for growth - growth that benefits the majority of the population - in the long term. ... It is more effective to invest in education. Highly qualified workers have less to fear from cheap competition from abroad. This strategy may not improve the GDP figures for the next quarter but it would certainly improve the long-term prospects of employees." (15/08/2008)

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More from the press review on the subject » Economic Policy, » Germany
All available articles from » Björn Finke

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