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Eurozone Narrowly Avoids Return To Contraction In Third Quarter Led By French Weakness
Following the second quarter 0.3% rise in Eurozone GDP, which ended a multi year European recession (and who can possibly forget all those "strong" PMI numbers that helped launch a thousand clickbait slideshows), the proclamations for an imminent European golden age came hot and heavy. This was before the imploding European inflation print was announced and certainly before the ECB had no choice but to cut rates and even hint at QE, shattering all hopes of European growth. And just over an hour ago, the latest validation that just as we expected Europe is on the verge of a triple dip recession, came out of Eurostat (which may or may not get back to the issue of Spanish data integrity eventually), which reported that just like in Japan, the sequential growth rate in Europe is once again not only stalling but was dangerously close to once again contracting in the third quarter when it printed by the smallest possible positive quantum of 0.1%.
The WSJ map below conveniently shows that while Germany grew 0.3% in Q3, even if said growth is precarious, and Spain had a laughable 0.1% growth despite nearly 30% unemployment, it was France and Italy, both contracting at a 0.1% rate, that was the marginal source of disappointment.
The full breakdown by Euro area nation:
WSJ has a detailed breakdown:
Euro-zone GDP expanded 0.1% from the previous quarter, or 0.4% at an annualized rate, the European Union's statistics agency Eurostat said Thursday. That is down sharply from roughly 1.2% annualized growth in the second quarter. The euro-zone economy contracted for six-straight quarters from late 2011 through the first three months of this year.
Germany's GDP increased 1.3% in the third quarter from the preceding period on an annualized basis, according to calculations by J.P. Morgan matching economists' forecasts. That marked a significant slowdown from the second quarter, when German GDP swelled 2.9% annualized, buoyed by a rebound in construction and other production after a harsh winter.
France's GDP unexpectedly contracted by 0.6%, at an annualized rate, in the third quarter. Household spending increased slightly, but not enough to offset steep slides in investment and net trade.
Analysts see little evidence of a quick turnaround in France. "Private consumption will remain hampered by high unemployment while a strong export-led recovery will remain unlikely before further efforts are made to increase the country's attractiveness," said Julien Manceaux, economist at ING Bank, in a research note.
Italy's economy shrank slightly, its ninth-straight quarterly contraction.
Germany, France and Italy combine for two-thirds of euro-zone GDP.
...
Yet even if the euro zone is, technically speaking, no longer in recession, by many measures including unemployment, wages and inflation the currency bloc remains stuck in a severe downturn. The jobless rate is at a euro-era high of 12.2%. Annual inflation slowed to a mere 0.7% in October, far below the ECB's target of slightly below 2% over the medium term.
And considering that it is now the ECB's primary mission to lower the Euro, since in its view the threat of redenomination is gone and Draghi can afford lower EUR pairs without setting off the sovereign bond sell off timebomb (he is wrong), expect even more such disappointing reports in the future to justify the weaker currency. Sure enough, if yesterday's warning by the ECB's Praet of potential QE was not enough to push the EURUSD pair lower, today's GDP report has once again succeeded in lowering the pair from 1.35 to just above 1.34.
The currency wars are now once again fully back on, and like every time, the scramble to telegraph one's economy is weaker is of paramount importance.
Source: Eurostat
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Of course you mean "it was Spain and Italy, both contracting at a 0.1% rate," Not that it makes much difference. They're all fucked.
AND EUROPEAN PRESIDENT OF THE MONTH IS....
http://i.telegraph.co.uk/multimedia/archive/02661/hollande_2661326b.jpg
WE WISH YOU A HAPPY DEFICIT,
WE WISH YOU A HAPPY EXPLODING UNEMPLOYMENT
WE WISH YOU A HAPPY CRISIS
AND A DEPRESSION TO YOU!!!!
Hmmm. Not all countries submitted their stats yet. Lemme guess: Croatia: -1.8, Denmark: 0.2, Sweden: 0.4, Slovenia: -2.3, Greece: -4.8, ... Yeah, i'm pullin' numbers out of my ass, but so are they.
I'm European so I didn't elect the winner according to a score or number of votes or anything.
It just was his time...
why you ask?...
BECAUSE WE CAN!!!
But Krugman said that downgrades were just a political move against the French and that they actually have a vibrant thriving kleptocracy.
did he? what I know is that Dr. Krugman is very skeptical about the EUR. Seriously dislikes it
btw, the article is a jumble hodge podge of EU28 and EZ17 data and commentaries, which would warrant a mention of the newest ECB currency satellites and a comparison with BoE activity. just saying, something moar data does not help if the context goes overboard...
Didn't knew the Krug and I (and so many more - the majority?) had something fundamental in common...
Yeah, but the Germans blew every hope for a recovery in Europe because they had a trade surplus...
evil bastards...
lol, I love the German bashing, even now coming from the sacrosanct Euro Commission : Mutti, you are making too much money from a competitive market which we have created over thirty years (the true original reason for creating Eurogroup); please stop it at once. The Euro commission now burns its RULE # 1.
Now we are truly into circular logic. The best student gets negative points for being hard working and efficient.
Can someone explain to me how Euro thinking works; when we cannot mutualise debt and harmonise fiscal policy, all the while we mutualise money and monetary policy? What do Draghi and Mutti say to each other? "Please pass me the salt...Only if you pass me the pepper. You sauerkrout is so unsalty...You spaghetti lacks spice! " Mama mia!
When Fabius says to Iran : "your copy is not clean, please revise it"... and Lady Ashton sings "no, no we love ya Rohani!"
WTF is this dance that they have invented?
And can they REALLY pretend that the US Obammy/Kerry admin. defends human rights in Syria when USA admin. is ALL IN into NSA scam world wide like a Octopussy tentacular poison machine?
Afghan poppy growing has never been better! TYVM State department & CIA!
Its time we had an ASKECB day with Draghi and Mutti ! That would be such fun!
What do Draghi and Mutti say to each other? Pass me the stresstest .... and TARGET 2, if you'd please ...
What is the difference between 0.01 and 0.00 when the number are dorked with so much.
We all know.
are they? if they GDP numbers are, then why not the unemployment ones, too? it's easy to assume that all statistical services of this planet are corrupt, yet remember that eurostats aggregates national data sets. 28 different ones
Uhm, did you by any chance miss yesterday's article on stats-cheating in Spain?
0.1% is as good as 0%, or, knowing the statist thugs we're dealing woth, perhaps even worse.
sats cheating in Spain is something I mentioned here on ZH... last year
yet again, in which direction? and when? In the ladt ten years the Spanish unemployment numbers were overstated, for example
don't mind me, keep it simple if this makes you happy
What, unemployment numbers cooked?!? Naah, no fucking way, dude - seriously, impossibru!11.....
There has to be just a small "weakness"... otherwise there is no reason for the theft of wealth from society via QE policies.
There can never be a real rate economic growth as long as QE policies exist. Tink about it. Real production has to outstrip the printed ut of thin air, $3+Trillion.... before we even get to breakeven in regard to a real rate of growth.
But no worries ... the club that Greenspan, Bernanke, and Yellen come from.... they know that already.
GDP positive. Buy, buy, buy...
and don't ask
So you are saying there is a "chance" that the world economy is not tanking? Bullish!
Francois Hollande will be up soon complaining that it simply isn't fair for France to have such weakness and will demand the ECB prints them some fresh money to spend.
My idea would be to give France "Volkswagen" and all is fixed.
Don't be downhearted. Always look on the bright side of life.
Economy minister Moscovici "Falling growth is not a sign of decline" nor is it a surprise.
http://www.boursorama.com/actualites/moscovici-le-repli-de-la-croissance--pas-un-indicateur-de-declin-47205ec343fb78b58533a4fa68c49791
Yeah, right.
Impressive results for Europe! Still there is some growth left in Romania and in the City of London but for how long? It would in fact be interesting to see a breakdown by Landers/Prefectures/etc instead of countries to understand what is still working and what is truly depressed. Or maybe not: the next recession in 2014 will just smoother the place in red. It is mind blowing that the market keeps going up as it is. What gives?
In Romania, the growth was mostly because of good agricultural year. Without that, it would have been +0.3% yoy.
On this subject the redoutable Euro statism and bureaucracy hater of Tory bend, supreme prestitute of oligarchy UK, The Economist, had this heading :
Spain’s economy: The worst may be over | The Economist
Begad, when the Economist turns coat and instead of Euro bashing says there is hope; what is the Anglo old school tie world coming to?
Admittedly drowning under UK implications in NSA spying and new print to infinity easy money policy mantra, its banks now looking RBS into austerity forever as Cameron has declared, the Staid Economist has lost its faith, temporarliy at least, in Auld LAng Syne and Brolly, Bowler hatted cheers.
London now becomes FOREIGN oligarchy land more and more to the exclusion of local young sprouts who live in Reading or thereabouts and commute... And that has to cause gripe in over ripe John Bull circles of Nigel Farage vintage.
Euro land may be in for a Euroskeptic surprise in 2014 elections to parliament; the more we stew in our euro juice the more the "far right" goes "bogey man furriner seeking one eyed jack".
Yikes, we have lost our compass on learning from WW2 hate spiel and hate your neighbour looks like becoming respectable in this collective race to bottom. The clock moves back to orange mechanic dystopia.
so our GDP grew 0.3%.... the expenses of the state are also included....
and our deficit JUMPED 7% this year...
YEAH BABY!!!
THAT'S EFFICIANC... EFFICACIT.... EFFIN.... EFFIZIANC.....
FUCK IT! BANG UP JOB!!
So what you're saying is that if only governments spent moar, than GDP would be moar?
Forward, Dr. Krugman!
YES!!! MOAR IS MOAR AND LESS IS LESS!!
Problems look to be all solved. Everyone is happy and doing just great.
Thats a perfect goldilocks number for them. It takes away the we are in a recession headline, but yet give Draghi more than plenty of cover to catch up on printing.....
All the while our porridge is being eaten by some bitch who broke into our houses... Sounds right.
Buy MOAR STAWKS!!!!