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Eurozone Economies Declined In 2012

Feb 15, 2013
Originally published on February 15, 2013 8:39 am

Transcript

LINDA WERTHEIMER, HOST:

NPR's business news starts with Europe's rocky economy.

(SOUNDBITE OF MUSIC)

WERTHEIMER: It was a tough three months for the eurozone at the end of last year. The area fell deeper into recession.

And as NPR's John Ydstie reports, it's expected to remain in recession well into 2013.

JOHN YDSTIE, BYLINE: The output of the eurozone fell six-tenths of a percent in the final three months of last year, according to a report from Eurostat. The decline translates to an economy contracting at a 2.3 percent annual rate.

Statistics from individual countries show Germany, the eurozone's largest economy, shrinking at that same rate. The eurozone's other big economies, France, Spain, Italy and the Netherlands also declined.

Nigel Gault of IHS Global Insight says government budget cuts are to blame.

NIGEL GAULT: There are austerity policies being put in place, especially in the most troubled regions across southern Europe, and those are taking a toll on growth.

YDSTIE: Germany's economy already appears to be bouncing back from the end of the year downturn, partly because it's Asian export markets are strengthening. But the prospects for a pick-up for the eurozone as a whole are less hopeful. European Central Bank officials expect the area will begin to recover later in 2013, but what exactly will fuel that rebound is unclear.

European financial markets strengthened in the past year, after the ECB committed to do whatever it takes to support the euro. But that move hasn't yet boosted business activity.

John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.