“The debt crisis dragged the euro zone into its second recession since 2009 in the third quarter despite modest growth in Germany and France, data showed on Thursday,” Robin Emmott and Michelle Martin report for Reuters. “The two leading economies both managed 0.2 percent growth in the July-to-September period. But the resilience could not save the austerity-hit 17-nation bloc from overall contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.”
“Economic output in the euro zone fell 0.1 percent in the quarter, following a 0.2-percent drop in the second quarter,” Emmott and Martin report. “Those two quarters of contraction put the euro zone’s 9.4 trillion euro ($12 trillion) economy in recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.”
Emmott and Martin report, “‘That was the last good number Germany for the time being,’ said Joerg Kraemer, chief economist at Commerzbank. ‘The business climate… has caved in.’ Most economists expect Germany to contract in the fourth quarter for the first time since the end of 2011. Where Germany goes, France is likely to follow and economists expect its economy to shrink in the October-to-December period… The Commission says the euro zone’s economies will be much healthier overall next year than in 2009, which was the nadir of bloated budgets when Greece’s fiscal deficit reached a record 15.6 percent and Ireland was not far off at 13.9 percent.”
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