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Euro zone falls into double dip recession

Thursday, Nov 15, 2012 - 01:53

Nov.15 - The euro zone fell back into recession in the third quarter, the second since the financial crisis in 2009, as modest French and German growth couldn't make up for a slump across Europe. Some economists say austerity is to blame for the double dip, and predict there is worse to come. Joanna Partridge reports

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German protestors joined Europe's day of action against austerity on Wednesday. But it was a show of solidarity rather than a demonstration over cuts. Their economy has held up relatively well recently - at least so far. Latest third quarter data suggests there may be signs of change. Europe's biggest economy grew 0.2% in line with forecasts but analysts warn demand for German goods may start drying up. France also grew by 0.2%, although neither economy can make up for the slump across Europe. The euro zone has slipped into its second recession since 2009. Joe Rundle from ETX Capital warns there's worse to come from Paris and Berlin. SOUNDBITE: Joe Rundle, Head of Trading, ETX Capital, saying (English): "Both have slowed down from previous quarters, so these are contracting stories of growth which is really worrying because the southern Europe are really relying on Germany and France to cause the economic growth that gets them out of this situation." There's no sign of improvement in Spain either as they cleared up after the general strike ended in violent clashes. Spain and Italy have been in recession for a year, and their economies shrank further, as did the large Dutch economy. Greece remains in a depression - and Brenda Kelly from IG says it's not clear where Athens goes from here. SOUNDBITE: Brenda Kelly, IG Markets, saying (English): "You have Greece still on the precipice as to whether they're going to have any sort of debt restructuring and of course you have the spat between the EU finance ministers and of course the IMF as to what sort of structure should be taking and what sort of developments should be done there." Some economists believe the strict austerity being adhered to across Europe has caused the double dip recession. And growth still looks a distant dream - the euro zone's economy is expected to shrink further between now and the end of the year.

Euro zone falls into double dip recession

Thursday, Nov 15, 2012 - 01:53

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