22 mayo, 2013
Can any country beat the recession?
The European Union is going currently enduring a period of Economic crisis. Even Germany, the biggest European economy, suffered a considerable decrease during the last quarter of 2012. The German economy is not quite in crisis, however, it may not be long until it is.
Moreover, France has officially entered into recession during the first quarter of 2013. According to data, the French economy has sunk by 0.2% in each of the last two quarters. This has led to pressure on President Hollande who has responded by saying “France should propose a credible program of reforms”. This may not be enough to turn around decreases which can be seen in almost every sector within the country.
France is expected to accelerate structural reforms in order to convince the EU to allow it an extra two years to reduce its deficit below 3%. This comes despite a claim from Claire Gatinois (Economist, Le Monde) that even though the French economy has entered recession the French economy is doing quite well. She does go on to add that although the economy is in a fairly good state, the two-year extension would result in a breath of fresh air for the whole country.
“The bottom line is that both the German and French economies, which together account for half of the Eurozone’s output, are in the doldrums”, declared Nick Spiro (Spiro Sovereign Strategy). According to him, both the core and the semi core of the EU are in “significantly worse shape than a year ago”.
There are, up to now, 9 of the 17 member states of the Euro zone in recession: Spain, France, Italy, Cyprus, Netherlands, Portugal, Finland, Greece and Slovenia. As a whole, the EU economy suffered a drop of 0.7% during 2012.
In conclusion, Germany is still considered to be the country to pull the EU out of recession; however, it appears the recession may be closer to pulling in Germany. If the two largest economies were to fall into recession, that would spell disaster for Europe.
Written by Sean Farrell, Saskia Schink, Joe Wood, Sergio Serrano, Roman Koshivka and Anastasia Markina