Posted on 07/14/2008 8:16:27 PM PDT by bruinbirdman
The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency.
Industrial production for the EMU bloc fell 1.9pc in May, according to fresh Eurostat data. It is the sharpest one-month decline for the region since the exchange rate crisis in 1992. Officials in Berlin have warned that Germany's economy could contract by as much as 1.5pc in the second quarter as export orders crumble.
Industrial output in both Italy and Greece has slumped 6.6pc over the past year. Portugal is off 6.2pc. "It is a very ugly picture: we're on maximum alert," said Emma Marcegaglia, head of Italy's business federation Confindustria.
Rome is now lobbying for a "New Deal" to revive Italy's economy through massive infrastructure projects. The idea is to use bonds issued by the European Investment Bank, allowing EU states to circumvent the 3pc limit on budget deficits imposed by the Maastricht Treaty.
Jacques Cailloux, Europe economist at the Royal Bank of Scotland, said a "reverse decoupling" is now under way as Europe goes down harder than the US - just as it did after the dotcom bust. "There is loss of momentum across the board. We can't exclude a recession," he said.
Spain is now spiralling into the worst crisis since the Franco dictatorship. "The economy is in dire straits," said Dominic Bryant, Spain expert at BNP Paribas.
Deutsche Bank said the property crisis is more serious that the collapse in the early 1990s. It expects a 35pc fall in real house prices by 2011 as the market slowly clears the vast overhang of property, now estimated at nearly 700,000 homes.
(Excerpt) Read more at telegraph.co.uk ...
Spain of course replaced their government with marxists, so it’s not much of a surprise they are in trouble.
Even with the downturn in the housing sector and financial meltdown, our economy is still growing albeit very sluggishly. Just listening to the reporting, you would think we were in the worst recession ever, but we haven’t even dipped into negative growth yet on a monthly basis, let alone two quarters of it.
Europeans are paying 8 bucks for a gallon of unleaded. And a lot of it is TAXES.
they are locked in socialism. I fear we are drifting in that direction.
Their central bankers kept rates too high for too long because they were battling oil prices, not inflation.
As well you should.
Audi announced or is about to announce, 0.9% financing on their German luxury cars, with terms up to 72 months. That should tell you how much they are hurting.
Oil price in $ is quite different than in euros. In fact, in the U.S.A., much of oil's price increase is due to Arabs and other foreign producers pricing oil in euros which have gained much vis a vis greenback (like 50%).
ECB says it is more concerned about inflation than recession.
yitbos
“Europeans are paying 8 bucks for a gallon of unleaded. And a lot of it is TAXES.”
The wholesalers in Europe pay the same price for a gallon of gas as do the wholesalers in the U.S. We’re bitching about 4 dollars a gallon, they’re paying 8 dollars a gallon. A gallon costs both wholesalers about $2.50 and the rest goes to...?
And the la la liberals would love for the U.S. of A. to be lots more like the Euro weenies -—— poor!
Well, as they say, when America sneezes everybody catches a mean cold! Gesundheit!
So much for gay marriage boosting their economy. California, take note.
Maybe you should be alert to the Muslim invasion while you're at it, Europe.
I am living in Eurotopia, and I could only wish that I paid only 8$ a gallon for gasoline! Your estimate of 8$ is several months behind the times. It is now roughly 10$ a gallon for gasoline, and more than 9$ a gallon for diesel, at least where I live.
This is what happens when they collectively work so hard to undermine the hand that feeds them. Reap what you sow, Europe.
This should be a warning to those who think Obama and his desire to “Change” America to be just like Europe will lead us.
Despite the left and it’s media’s attempts to make the US economy sound terrible, we are still plugging along with a 1.5% growth rate during this “recession” they are claiming.
Oil is still priced in USD on the world market.
Why is it that lefties always insist that America needs to change while our enemies get to remain the same?
yitbos
Just remind that Europeans have bikes and can go to work riding them, or just walking.
In fact, oil prices have made me return to my old college time in the last long distance race celebrated in my town.
What does not kill you, makes you stronger, that is the truth.
Regarding the crisis in Spain, it has nothing to do with the one of the Eurozone. What Spain is suffering is the collapse of a huge, well, H-U-G-E, real estate bubble; bubble that unfortunately has finanzed other crazy adventures like big investments in the so-called “green” energy.
The country with closer problems, although at a great distance, is the UK, out of the Eurozone. The crises in Germany and France, or Italy, have nothing to do with Spain’s, and won’t be so deep.
Furthermore, the interest rates in the Eurozone are not high. The neutral point is 4.75%. The oil is not so expensive against the Euro, but against the Dollar. This crisis has been triggered by the low cost of money and bankers lending it without limit. We all must acknowledge this, as the European Central Bank has done.
They refused to support us when we were attacked. We attacked them economically with a low $$. We are kicking their ass in their export markets and the pain is now in their home markets.
We are winning. The middle east is being transformed and is winning. The Euros are losing. The Amer-royalists Obama/Kerry/Fonda will not prevail
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