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Eurozone Debt Crisis Worsens: Europe Falls Back into Recession

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

Europe has dropped back into recession. In the third quarter economic output in Europe fell by .1%.  This followed a .2% drop in the second quarter for the $12 trillion European economy. Germany posted a .2% growth number but some experts expect that the larger economic crisis will also drag down Germany.

According to original reporting by Reuters, Joerg Kraemer, the chief economist at Commerzbank said, “That was the last good number Germany for the time being. I don’t expect the German economy to return to decent growth rates until the middle of next year.”

Similarly the French economy is also expected to be drug down by problems in the rest of Europe. Joost Beaumont of ABN Amro said, “”We expect the French economy to contract again in the final quarter of this year.”
Paul De Grauwe, an economist with the London School of Economics said, “We are now getting into a double dip recession which is entirely self-made. It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else.”

The worsening global economic conditions combined with a weak US jobs market and the fiscal cliff crisis worries US and Alabama leaders.  Alabama Commissioner of Agriculture and Industries John McMillan said on Facebook of the European recession news, “Are we next?”

Federal Reserve Bank of Dallas President Richard Fisher said in remarks given in Stanford, CA, “The Federal Reserve has been carrying the ball for the fiscal authorities by holding down interest rates in an attempt to stoke the recovery while the fiscal authorities wrestle themselves off the mat, but there are limits to what a monetary authority can do. Only the Congress of the United States can now save us from fiscal perdition. The Fed can’t “endlessly” keep purchasing bonds to keep the recovery going.”

Meanwhile in Europe millions of workers have gone on strike to protest austerity measures which have cut European entitlements. There have been a series of well publicized suicides by people in Spain who have had their homes repossessed.

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Numbers show that the Dutch economy contracted by 1.1%, while Spain declined by .8%

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Brandon Moseley is a senior reporter with six and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook.

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