Much of European Union Now in Recession
Monday, April 30th, 2012April 30, 2012
The economy of Spain has fallen into its second recession since 2009, the National Statistics Institute in Madrid announced today. The Spanish economy contracted by 0.3 percent in the first quarter of 2012, the same rate of contraction as in the fourth quarter of 2011. Economists generally define a recession as a nation’s gross domestic product contracting for two consecutive quarters. Officials in Spain are attempting to both enact austerity measures to restore government finances and grapple with the highest rate of unemployment in the European Union (EU)–24.4 percent. Last week, the New York-based credit rating agency Standard & Poor’s downgraded the credit rating of 16 Spanish banks as well as Spain’s government bonds.
Economist Ben May with London-based Capital Economics predicted that the recession will “deepen over the remainder of the year,” with an overall contraction of 1.5 percent in 2012 and another 3.0 percent in 2013.
Eight eurozone economies are now officially in recession: Belgium, Cyprus, the Netherlands, and Slovenia as well as the four eurozone countries plagued by massive national debt–Greece, Ireland, Italy, and Portugal. Several EU member nations that use their own currencies have also reported two consecutive quarters of negative growth: the Czech Republic, Denmark, and the United Kingdom.
Additional World Book articles:
- Business cycle
- Depression
- Crisis in the Eurozone (a special report)
- Economics 2009 (Back in Time article)
- Economics 2010 (Back in Time article)
- Economics 2011 (Back in Time article)