EU: Eurozone recession hits Germany hard

The Telegraph ^ | 2/14/2013 | Philip Aldrick

[bruinbirdman]

Germany's economy collapsed by 0.6pc in the final three months of last year as the eurozone recession finally caught up with the currency bloc’s most powerful member.

A sharp fall in exports from the region’s trading hub caused the larger-than-expected decline, as official figures showed that the eurozone as a whole slumped 0.6pc in the quarter, the worst performance in over three years. The currency area has contracted for three quarters running and by 0.5pc for the year as a whole. It is 1pc smaller than in September 2011.

Economists had expected Germany to be hit by the bloc’s waning fortunes but the scale of decline came as a surprise. France, which shrank by 0.3pc, and Italy, which was down 0.9pc – a sixth straight quarterly decline, also performed worse than predicted.

Evidence of the extent of the eurozone’s troubles came as Japan also posted a shock 0.1pc contraction in the three months to December – its third successive quarterly slump. The weak figures stoked speculation that new Prime Minister Shinzo Abe would step up his efforts to stimulate the economy.

The surprisingly poor eurozone data caused the currency to fall 0.9pc against the dollar to $1.3328 in early trading. Stock markets in Europe yo-yoed in early sessions, but were down slightly by midday. In Japan, the Nikkei rose 0.5pc and the currency largely held its ground.

In Europe, Anita Paluch, a sales trader at Gekko Capital Markets, said: “It is kind of disappointing that Germany, which had shown so much resilience, is now showing signs of suffering from the debt crisis . . .

[Zathras]

Germany is the only one holding the EU together. This could get very bad.

[GeronL]

It was going to hit them sooner or later

[Olog-hai]

I guess the press has still forgotten that the EU elites wanted this crisis? Germany’s taken its gold back from the fed in NY. Next move will be painful (for the “little people” mostly), but they do have a plan.

[MeneMeneTekelUpharsin]

Print more money. That will help the situation.

[Viennacon]

And more Muslim immigration. And more tolerance!

[garbanzo]

At what point does a “contraction” turn into a “recession” and then a “depression”?

[RoosterRedux]

Asked if this meant the government would have to introduce austerity measures to meet commitments to the European Union to reduce the public deficit to 3pc of output, he said he did not want to “condemn the country to recession”, adding: “I think that we must not add austerity to the difficulties today.”

Huh?

[Moltke]

ZEROPOINTSIX percent is “collapsing”?

OK, I’m not an economist, but seriously?