The good news: The eurozone economy has probably stopped contracting. The bad news: It isn't really going to grow, either.

I know, I know — with all of the rampagingly available employment opportunities, competitive tax and regulatory environments, and successful taming of out-of-control debts and deficits of broke governments, you might have been tempted to think the eurozone was in the clear and due for some robust economic growth any day now. I suppose we’ll just have to train ourselves to expect the unexpected.

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Via Reuters:

The euro zone has probably escaped from its lengthy recession, although there is little prospect the economy will start growing again at a healthy rate before 2015, according to a Reuters poll of 30 economists.

Respondents were almost unanimous that data on Wednesday will show the euro zone economy stopped contracting from April through June for the first time since the end of 2011. The consensus showing modest growth of 0.2 percent on the quarter. …

Still, few expect any kind of significant upturn from here.

The median outlook suggested euro zone gross domestic product (GDP) growth is unlikely to exceed 0.4 percent in any quarter from now until 2015.

The WSJ says much the same thing:

While the end of contraction can help support confidence among consumers and businesses, building momentum for the bloc’s economy, the 0.2% expansion that is expected pales in comparison with the 1.5% loss of output suffered over the previous six quarters. That period is dwarfed by the 5.7% fall in GDP the euro zone experienced in 2008 and 2009. The legacy of these two contractions is a record level of unemployment that is likely to take a long time to fall, meaning a persistent burden on public finances.

It’s hard to believe it can get much worse when mere stagnation-level economic growth is practically a celebratory event… but it probably can.

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I might ask what it is, exactly, that is supposedly going to change come 2015, except that states will be even deeper in debt and deeper enthralled in convoluted bailout packages on which they repeatedly fail to make the agreed-upon payments? Will anyone have made any substantive moves toward actually fixing the barely-functioning economic, political, and institutional conditions under which Europeans are struggling in real material misery with few opportunities? I have a terrible premonitory feeling that the European debt crisis is much more dormant than it is extinct, and worse still, the United States doesn’t seem determined to do too much better.

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Duane Patterson 11:00 AM | December 26, 2024
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