topics
tools
Expatica countries
Index Last Var.(%)
BEL 20 2130.24 0.51
DAX 6387.02 0.74
IBEX 30 6477.8 -1.00
CAC 40 3066.39 0.61
FTSE 100 5390.4 0.73
AEX 295.21 0.84
DJIA 12454.83 -0.60
Nasdaq 2837.53 -0.07
FTSE MIB 13151.9 -0.02
TSX Composite 11576.47 0.09
ASX 4120.2 0.96
Hang seng 18800.99 0.47
Straits Times 2787.55 0.53
ISEQ 20 503.13 0.44
You are here: Home News European News Recession storms across Europe

European News

archive
Enlarge font Decrease font Text size


15/05/2009Recession storms across Europe

France became the latest European countries to enter recession while Spain’s and Germany’s economies slump further.

Paris – France led a string of European countries entering recession on Friday as Germany, the continent's economic powerhouse, registered its worst performance on record in the first quarter.

As Asia's biggest economy, Japan, faced signs of mounting deflationary pressures, the gloomy data from Europe cast a pall over recent claims that the first green shoots of recovery had been sighted.

However Europe's leading stock markets rose at the open, with analysts saying the rises reflected an expectation that the crisis was bottoming out.

France became the last of the major European Union countries to dip into recession when figures from the official statistics agency INSEE, showed French gross domestic product shrank 1.2 percent in the first quarter of 2009 after falling by 1.5 percent in the final quarter of last year.

A recession is usually defined as two quarters of negative growth.

INSEE also updated its figure for French growth in 2008, reporting that the economy had grown by only 0.3 percent in 2008 rather than the 0.7 percent it had earlier offered as an estimate.

The French government expects the economy to shrink by around three percent this year, as the world financial crisis stifles credit and saps demand.

Meanwhile, France's neighbour and main trading partner Germany said its recession deepened in the first quarter, when the economy shrank by 3.8 percent, its strongest contraction since quarterly records began in 1970.

Germany, Europe's biggest economy and which accounts for a third of eurozone output, contracted by 3.8 percent in the first three months of the year compared to the final quarter of 2008, the statistics office said.

Official figures made equally depressing reading from other parts of central Europe, including Austria which slid into recession after its economy contracted by 2.8 percent in the first three months of the current year.

Romania also joined the recession club when its economy shrank by 2.6 percent in the first quarter while the economies of Italy, Slovakia and Hungary all recorded negative growth figures.

Despite the grim growth figures, Europe's main stock markets rose as investors looked forward to a prospective recovery, dealers said.

London's FTSE 100 index of top shares gained 0.75 percent to stand at 4,395.11 points in early trade while in Paris the CAC 40 was up 0.72 percent and Frankfurt's DAX 30 advanced 0.40 percent.

"This time around, the worst really seems to be over," said Carsten Brzeski, an analyst at ING bank, citing other more positive forward-looking economic indicators for the German economy despite its first-quarter contraction.

"Looking ahead, the second quarter has the potential to surprise to the upside," boosting stock markets, he said.

Japanese share prices closed up 1.88 percent, mirroring gains on Wall Street as investors eyed prospects for an economic recovery.

The rises came despite mounting concerns that the world's number two economy may be facing a repetition of its 1990s deflationary spiral when falling prices led to weak consumer spending.

Central bank figures showed wholesale prices fell 3.8 percent in April from a year earlier, the steepest drop in 22 years.

Consumer price inflation turned negative in March for the first time in 18 months and the fear is that Japan may see a repeat of its 1990s deflationary spiral when falling prices led to weak consumer spending.

However Finance Minister Kaoru Yosano said there were signs the recession was abating with Japan's core machinery orders falling 1.3 percent in March from the previous month, less than expected.

"I welcome some signs of easing in the economic slowdown. But we need to remain alert about overall economic conditions," he told reporters.

US Treasury Secretary Timothy Geithner said earlier this week the financial system "is starting to heal" as a response to government efforts to get more credit flowing, including moves to clean up so-called "toxic assets" that are weighing on banks' ability to lend.

AFP / Expatica


0 reactions to this article

Be the first person to add a comment

General rating: Not rated yet

Rate article:    Add my rating



0 reactions to this article

Be the first person to add a comment
Discussion Forums

Technology in Spain

Sat phones/internet links

English in Spain

What is the best travel insurance cover to Spain?

American in Spain

U.S. citizens, plan to vote in 2012? Did you know...

Relocation to Spain

thinking of moving to madrid

Jobs in Spain

Job Agencies or how to find work.

participate in the forums

Inside Expatica
Editor's Guide: Getting Started in Spain

Editor's Guide: Getting Started in Spain

Expatica's Getting Started section will provide practical information on how you can open a bank account, exchange your driving licence, improve your Spanish, and more.

Groups and Clubs in Madrid

Groups and Clubs in Madrid

Here's a guide to an extensive list of groups and clubs in Madrid for expats, from sports groups to social and family gatherings.

Groups and Clubs around Spain

Groups and Clubs around Spain

A brief introduction to our Tax section for Spain, from help with inheritance tax to accounting advice.

Groups and Clubs in Barcelona

Groups and Clubs in Barcelona

Here's a short introduction to our Banking section for those living in Spain, from what to ask the experts to opening a Spanish bank account.