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EURO TEETERS…

By ATWadmin On August 15th, 2008

Interesting to see that the spectre of recession is looming over the eurozone after the economy in the
15-country region shrank for the first time since the single currency was
introduced nearly a decade ago.

Eurozone output contracted by 0.2 per cent in the three months to June, after
a 0.7 per cent rise in the first quarter, official figures showed.Activity was dragged down by falling gross domestic product in the area’s
traditional economic mainstays of Germany, France and Italy as consumers and
businesses struggled with the soaring cost of fuel and energy. A drop in exports because of weaker demand and the recent strong euro also
curbed growth, which slowed from 2.1 per cent to 1.5 per cent on an annual
basis. If output falls again in the next quarter, the eurozone will be in
technical recession. A recession is defined as two quarters of contraction.Jennifer McKeown, European economist for Capital Economics, was even more
downbeat. “It looks likely that the eurozone will be the first major economy
to enter recession,” she said.

But not all countries in the Eurozone are in the same economic condition, and so the question becomes one of how to best help each indiviudal nation when in fact there is only one economic club the ECB can use? If interests rates are cut, will already rising inflation surge ahead further? What impact will this have on wage demands and the various national agreements in place between organised Labour and the State? It’s going to interesting watching….

5 Responses to “EURO TEETERS…”

  1. The Euro was a misconceived idea based on politics and not economics. Let’s see who will be first to cut and run.

    If our leaders in Ireland had any sense they would use the Lisbon result to engineer our expulsion from the EU on a "no hard feeling" basis.

    It has shown it’s not a military superpower and it’s not an economic superpower. It has a social welfare/human rights ethos that turns the whole social aspect into a chancers charter.

    It is bureaucratic, dogmatic and undemocratic. And what’s the point of it all? To stop Germany invading France again. But France has nuclear weapons. Nobody is going to invade them.

  2. >>The Euro was a misconceived idea based on politics and not economics. Let’s see who will be first to cut and run.<<

    At the moment, the only ones running are those running to be next to get it.

    >>It has shown it’s not a military superpower <<

    Aah, it must be a failure then!

    >>a social welfare/human rights ethos<<

    The a social welfare/human rights ethos of the EU is one of its great strengths, It is envied by many people around the world and is one of the reasons so many countries in eastern and south-eastern Europe are impatient to join.

    >>And what’s the point of it all? To stop Germany invading France again.<<

    Are the tabloids still coming up with that one?

  3. "If our leaders in Ireland had any sense they would use the Lisbon result to engineer our expulsion from the EU on a "no hard feeling" basis."

    Henry,

    I hope you’re joking. If the Irish Government ever did that they should be shot for stupidity.

    The world economy is having a hard time and the Eurozone is no different.

  4. Noel

    The first defence most EU supporters come up with is the "peace in Europe" line.

    >>It has shown it’s not a military superpower <<

    Aah, it must be a failure then!

    Only if it thinks it is one or aspires to be one. And it does.

    The a social welfare/human rights ethos of the EU is one of its great strengths, It is envied by many people around the world and is one of the reasons so many countries in eastern and south-eastern Europe are impatient to join.

    Hmmm..If they think Social Welfare and Human Rights is such a good idea they could simply introduce them. What they are hoping possibly is that the richer EU countries will subsidise them. I have no problem with that but the richer EU countries are going to have enough trouble funding their own welfare systems due to the demographic winter Europe is heading into.

  5. Reg

    I believe the EU will fall apart in the coming decades. The timing of our exit should be a tactical question. I don’t think our leaders understand what is coming so it wasn’t a joke but it was wishful thinking.