Today marked the start of the sixth quarter that the eurozone has been in a recession, underscored by the austerity measure taking place in Cyprus and in Spain, amongst other countries in the European Union. According to statistics that were presented by the EU yesterday, 9 of the 17 countries in the EU are currently in a recession. For the sixth consecutive quarter the EU economy has declined, dropping .02 percent this quarter (Jan-March, 2013).
It is notable to state that this contraction is far less when compared to the contraction that was felt last quarter, which was .06 percent, or three times as worse. However, it does denote an unwelcomed and trident decline for the struggling Euro, which is the sole currency for the 17 countries, excluding England and Germany, the economic powerhouses of the EU. Governments are addressing this fiscal decline by raising already too-high taxes and slashing budgets, austerity measures that are seemingly having minimal impact upon the struggling $12.2 trillion Euro economy.
Existing austerity measures have been highlighted by scores of civil unrest and rising unemployment rates. Greece has more than 27.2 percent of its population unemployed, the highest number of any country in the history of keeping records. Spain sets the second record for unemployment at 26.7 percent, and Italy is still reeling from a government showdown and a current 11.2 percent unemployment rate.
This recession marks the longest one in the 14 years since the Euro has been introduced. Typically, recessions are defined as experiencing two or more quarters of simultaneous decline in an economy.
“The eurozone is facing a double blow from necessary restructuring of its domestic economy and somewhat disappointing growth in world trade, in particular demand from emerging markets,” said Marie Diron, senior economic adviser to Ernst & Young.
The eurozone hosts more than half a billion people, and is the largest export market in the world. If the recession continues at this pace, it could affect U.S. and Asian markets. Eurozone economy is growing at a fluttering pace of .02 percent annually. The U.S., the world’s strongest economy, is on course at 2 percent growth. Meanwhile, China, the world’s fastest growing and No. 2 worldwide economy is growing at 8 percent annually.